[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]


 
               AGENCY BUDGETS AND PRIORITIES FOR 2008

=======================================================================

                                (109-9)

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                    WATER RESOURCES AND ENVIRONMENT

                                 OF THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                           FEBRUARY 14, 2007

                               __________


                       Printed for the use of the
             Committee on Transportation and Infrastructure

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             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                 JAMES L. OBERSTAR, Minnesota, Chairman

NICK J. RAHALL, II, West Virginia    JOHN L. MICA, Florida
PETER A. DeFAZIO, Oregon             DON YOUNG, Alaska
JERRY F. COSTELLO, Illinois          THOMAS E. PETRI, Wisconsin
ELEANOR HOLMES NORTON, District of   HOWARD COBLE, North Carolina
Columbia                             JOHN J. DUNCAN, Jr., Tennessee
JERROLD NADLER, New York             WAYNE T. GILCHREST, Maryland
CORRINE BROWN, Florida               VERNON J. EHLERS, Michigan
BOB FILNER, California               STEVEN C. LaTOURETTE, Ohio
EDDIE BERNICE JOHNSON, Texas         RICHARD H. BAKER, Louisiana
GENE TAYLOR, Mississippi             FRANK A. LoBIONDO, New Jersey
ELIJAH E. CUMMINGS, Maryland         JERRY MORAN, Kansas
ELLEN O. TAUSCHER, California        GARY G. MILLER, California
LEONARD L. BOSWELL, Iowa             ROBIN HAYES, North Carolina
TIM HOLDEN, Pennsylvania             HENRY E. BROWN, Jr., South 
BRIAN BAIRD, Washington              Carolina
RICK LARSEN, Washington              TIMOTHY V. JOHNSON, Illinois
MICHAEL E. CAPUANO, Massachusetts    TODD RUSSELL PLATTS, Pennsylvania
JULIA CARSON, Indiana                SAM GRAVES, Missouri
TIMOTHY H. BISHOP, New York          BILL SHUSTER, Pennsylvania
MICHAEL H. MICHAUD, Maine            JOHN BOOZMAN, Arkansas
BRIAN HIGGINS, New York              SHELLEY MOORE CAPITO, West 
RUSS CARNAHAN, Missouri              Virginia
JOHN T. SALAZAR, Colorado            JIM GERLACH, Pennsylvania
GRACE F. NAPOLITANO, California      MARIO DIAZ-BALART, Florida
DANIEL LIPINSKI, Illinois            CHARLES W. DENT, Pennsylvania
DORIS O. MATSUI, California          TED POE, Texas
NICK LAMPSON, Texas                  DAVID G. REICHERT, Washington
ZACHARY T. SPACE, Ohio               CONNIE MACK, Florida
MAZIE K. HIRONO, Hawaii              JOHN R. `RANDY' KUHL, Jr., New 
BRUCE L. BRALEY, Iowa                York
JASON ALTMIRE, Pennsylvania          LYNN A WESTMORELAND, Georgia
TIMOTHY J. WALZ, Minnesota           CHARLES W. BOUSTANY, Jr., 
HEATH SHULER, North Carolina         Louisiana
MICHAEL A. ACURI, New York           JEAN SCHMIDT, Ohio
HARRY E. MITCHELL, Arizona           CANDICE S. MILLER, Michigan
CHRISTOPHER P. CARNEY, Pennsylvania  THELMA D. DRAKE, Virginia
JOHN J. HALL, New York               MARY FALLIN, Oklahoma
STEVE KAGEN, Wisconsin               VERN BUCHANAN, Florida
STEVE COHEN, Tennessee
JERRY McNERNEY, California
VACANCY

                                  (ii)

  


            Subcommittee on Water Resources and Environment

                EDDIE BERNICE JOHNSON, Texas, Chairwoman

GENE TAYLOR, Mississippi             RICHARD H. BAKER, Louisiana
BRIAN BAIRD, Washington              JOHN J. DUNCAN, Jr., Tennessee
DORIS O. MATSUI, California          WAYNE T. GILCHREST, Maryland
JERRY F. COSTELLO, Illinois          VERNON J. EHLERS, Michigan
TIMOTHY H. BISHOP, New York          FRANK A. LoBIONDO, New Jersey
BRIAN HIGGINS, New York              GARY G. MILLER, California
RUSS CARNAHAN, Missouri              ROBIN HAYES, North Carolina
JOHN T. SALAZAR, Colorado            HENRY E. BROWN, Jr., South 
MAZIE K. HIRONO, Hawaii              Carolina
HEATH SHULER, North Carolina         TODD RUSSELL PLATTS, Pennsylvania
HARRY E. MITCHELL, Arizaon           BILL SHUSTER, Pennsylvania
JOHN J. HALL, New York               JOHN BOOZMAN, Arkansas
STEVE KAGEN, Wisconsin               CONNIE MACK, Florida
JERRY MCNERNEY, California           JOHN R. `RANDY' KUHL, Jr., New 
ELEANOR HOLMES NORTON, District of   York
Columbia                             CHARLES W. BOUSTANY, Jr., 
BOB FILNER, California               Louisiana
ELLEN O. TAUSCHER, California        JEAN SCHMIDT, Ohio
MICHAEL E. CAPUANO, Massachusetts    CANDICE S. MILLER, Michigan
GRACE F. NAPOLITANO, California      THELMA D. DRAKE, Virginia
MICHAEL A ARCURI, New York           JOHN L. MICA, Florida
JAMES L. OBERSTAR, Minnesota           (Ex Officio)
  (Ex Officio)

                                 (iii)





























                                CONTENTS

Summary of Subject Matter........................................    vi

                               TESTIMONY

                                                                   Page
 Bodine, Hon. Susan Parker, Assistant Administrator for Solid 
  Waste and Emergency Response, U.S. Environmental Protection 
  Agency.........................................................    37
 Dunlop, George S., Principal Deputy Assistant Secretary, Army 
  Civil Works, U.S. Army Corps of Engineers......................    10
 Grumbles, Hon. Benjamin H., Assistant Asministrator for Office 
  of Water, U.S. Environmental Protection Agency.................    37
 Johnson, Collister, Jr., Administrator, St. Lawrence Seaway 
  Development Corporation........................................    10
 Kilgore, Tom, Chief Executive Officer, Tennessee Valley 
  Authority......................................................    37
 Lancaster, Chief Arlen, Natural Resources Conservation Service, 
  U.S. Department of Agriculture.................................    37
Lancaster, Chief Arlen, Chief of the U.S. Department of 
  Agriculture's Natural Resource Conservation Service............    37
 Strock, Lieutenant General Carl, Chief of Engineers, U.S. Army 
  Corps of Engineers.............................................    10

          PREPARED STATEMENT SUBMITTED BY MEMBERS OF CONGRESS

Arcuri, Hon. Michael A., of New York.............................    52
Baker, Hon. Richard, of Louiiana.................................    54
Carnahan, Hon. Russ, of Missouri.................................    63
Costello, Hon. Jerry F., of Illinois.............................    64
Gilchrest, Hon. Wayne T., of Maryland............................    67
Mica, Hon. John, of Florida......................................    95
Mitchell, Hon. Harry, of Arizona.................................    98

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

 Bodine, Hon. Susan Parker.......................................    57
 Grumbles, Hon. Benjamin H.......................................    69
 Johnson, Collister, Jr..........................................    76
 Kilgore, Tom....................................................    84
 Lancaster, Chief Arlen..........................................    90
 Strock, Lieutenant General Carl.................................   102

                         ADDITION TO THE RECORD

Woodley, Hon. John Paul, Jr., Assistant Secretary of the Army for 
  Civil Works, statement.........................................   107
                                  (v)
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



           AGENCY BUDGETS AND PRIORITIES FOR FISCAL YEAR 2008

                              ----------                              


                      Wednesday, February 14, 2007

                  House of Representatives,
    Committee on Transportation and Infrastructure,
           Subcommittee on Water Resources and Environment,
                                                    Washington, DC.
    The committee met, pursuant to call, at 10:00 a.m., in room 
2167, Rayburn House Office Building, the Honorable Eddie 
Bernice Johnson [chairman of the committee] presiding.
    Ms. Johnson of Texas. Good morning. Today we will receive 
testimony on the President's budget request for fiscal year 
2008 and its impact to the programs and priorities of the 
Subcommittee on Water Resources and Environment. Unfortunately, 
the priorities reflected in this budget are contrary to the 
Nation's priorities of protecting the public safety and 
environment, investing in the future and ensuring continued 
economic prosperity. Quite simply, this budget is not adequate 
to meet the Nation's needs. The budget takes a penny-wise, 
pound foolish view of the economy, making imprudent short-term 
cuts to programs that have proven essential for long-term 
economic health.
    This Administration fails to recognize that continued 
investment in water-related infrastructure is a key element for 
stimulating and improving the U.S. economy, an economy built on 
the investments of our predecessors. Cutting investment today 
and exploding future deficits can only serve to deny economic 
opportunity to future generations. For example, the President's 
budget request for the Corps' construction account is close to 
$500 million less than the likely appropriation for the current 
fiscal year. This amount is 45 percent below the Corps' own 
capability numbers, which represent the amount of work the 
Corps could carry out if funding were available.
    As a result, roughly half of the work that the Corps is 
authorized and ready to carry out will be delayed until funding 
is available, leading to further delay and completing essential 
flood control, navigation and ecosystem restoration projects. I 
am certain that every member of this Subcommittee can identify 
important projects that are targeted for slowdown, reductions 
or elimination in this budget.
    I am also concerned about the impact of this budget on the 
Corps' ability to conduct vital operation and maintenance 
activities for both navigation and flood control projects. The 
passage of time has taken a toll and has created the real 
possibility of catastrophic failure for transportation linkages 
or flood protection projects.
    As the Nation learned in the aftermath of Hurricanes 
Katrina and Rita, the implications of failure of our navigation 
and flood control infrastructure can be devastating, not only 
to local economies, but to lives and livelihoods. Yet this 
budget forces the Corps to do more with less money and risk the 
continued reliability of our infrastructure on the hope that it 
will hold together for another few years. This is 
irresponsible.
    These cuts are also not limited to the Corps, but also in 
the budget of the other Federal agencies represented here 
today. The small watershed programs of the Natural Resources 
Conservation Service are completely eliminated. There is no 
consideration of termination costs, no consideration of State 
or local investment, and no consideration of the potential 
threat to public safety that comes from shutting down these 
programs.
    As history has proven, the Federal Government will pay up 
front to protect lives and property, or will pay afterwards to 
help rebuild and restore people's lives, which usually costs 
much more.
    For the Environmental Protection Agency, this budget 
represents the lowest funding level requested by the current 
Administration for several programs essential to safeguarding 
human health and protecting the environment. Most notable is 
the 36.6 percent reduction to primary Federal programs for 
investing in wastewater infrastructure, the Clean Water State 
Revolving Fund. As noted by this Subcommittee's hearing last 
month, annual needs for water infrastructure are estimated 
between $3 billion and $11 billion above current expenditures. 
Yet the budget would eliminate almost $400 million in Federal 
grants to States for revolving loan funds. These reductions are 
simply unacceptable and are the exact opposite approach to that 
taken by the Committee last week in approving legislation to 
authorize $20 billion over five years for the Clean Water State 
Revolving Fund.
    States and local communities have warned that reduced 
funding for wastewater infrastructure programs make it 
difficult to respond to failing wastewater infrastructure and 
could force the delay of essential upgrades to improve water 
quality. Again, we all know of examples where local communities 
have been unable to fund necessary projects due to the lack of 
availability of funds.
    The Superfund program fares no better in this budget. Since 
the Administration came into office, the President's budget has 
almost halved the annual number of Superfund cleanups achieved 
by the previous administration. From 2001 to 2008, this 
Administration has presided over a significant slowdown in the 
pace of toxic waste cleanups from an average of 73 sites per 
year to just over 40.
    Unfortunately, this year, the President's budget announced 
that it must revise its prediction for fiscal year 2007 
downward from 40 sites to just 27. Barring any further 
revisions of fiscal year 2008, the budget forecasts only 30 
sites will reach the construction complete threshold. These 
figures validate my prediction at last year's budget hearing of 
a second slowdown of the Superfund program and that 
insufficient funding to address contaminated sites further 
slows cleanups and may force EPA to limit the number of future 
sites that can enter the cleanup program.
    The budget also reinforces the troublesome findings of a 
2004 EPA Inspector General's report that highlighted how 
limited funding for the Superfund program has hampered its 
ability to clean up toxic waste sites. EPA has responded that a 
major cause for the shortfall is that the remaining sites are 
more complex and more costly. However, most of these sites have 
been in the Superfund pipeline for decades, so it comes as no 
surprise that the additional cleanup dollars are going to be 
necessary. Yet for the last several years, the President's 
request for the Superfund budget has been declining, failing 
even to keep up with the pace of inflation. Fewer resources for 
more expensive sites can only lead to slowdowns.
    This budget again proposes that all Federal spending for 
the Superfund program will be from the general taxpayers and 
continues the alarming trend of collecting fewer and fewer cost 
recoveries from responsible parties. It is not how the 
Superfund program was intended to be run when it was enacted. 
Gone are the days when the Superfund program was a "polluter 
pays" program. Now the program has become less than super, 
requiring everyday taxpayers to foot the bill for cleaning up 
someone else's mess. Unfortunately for the American people, the 
list of cuts to important programs goes on and on. We cannot 
under-invest in the Nation's infrastructure nor its 
environment. We have an obligation to our future generations to 
provide a cleaner, safer and more secure world for them to 
live.
    I welcome the witnesses here today and I look forward to 
today's testimony.
    I would recognize Mr. Mica, and then Mr. Boustany.
    Mr. Mica. Thank you for recognizing me, and thank you for 
going forward today. I am glad. There were some of the hearings 
that were canceled or postponed. But it is important that we 
all move closer to the Capitol Building, get a small hovel or 
apartment where we can walk right to the Capitol and go to work 
immediately. I appreciate your pressing forward. I understand 
Mr. Baker will be here, he's delayed, and we will be joined by 
some of the other members on both sides of the aisle.
    Today I know we are discussing some of the budget items, 
important matters under the jurisdiction of the Subcommittee on 
Water Resources and Environment. I think most of the people 
around here know that I am a pretty tight-fisted fiscal 
conservative. And I often am known also for supporting the 
President's efforts to control Government spending.
    I realize also that the Administration finds itself in a 
very difficult situation, having to make some very tough 
choices, particularly when we face national security and 
homeland security requirements that are unprecedented and very 
expensive. Again, we have some very tough choices and we have 
to set priorities.
    However, I believe that the Administration and Congress 
have the same responsibility of also sustaining economic growth 
while protecting our environment. I have to say that I am a bit 
disappointed in the Administration's budget. I do again 
recognize the pressure they are under. But I think that we have 
to look at some of what we are doing in this Subcommittee and 
have responsibility over our really strong investments in many 
important program areas for the Country.
    The civil works program of the Corps of Engineers, we have 
seen how vital that is with Katrina, with the storms that we 
face, coastal storms and flood damage. Part of our Federal 
responsibility is also to partner to keep our ports and 
waterways open for commerce and restore our aquatic ecosystems.
    One of the things I have learned about since taking over as 
the Republican leader too is the need for some of the dredging 
and deepening of our harbors, new requirements to accommodate 
new classes of cargo ships and other ships. If we want to be 
able to compete, we are going to have to go forward with those 
projects that the Corps is involved in, again, with some of our 
State and local partners. The construction funding for these 
projects unfortunately would be cut if the proposed budget by 
the Administration were followed.
    Another very important area is the EPA Clean Water State 
Revolving Fund program, which provides, as you know, low 
interest loans to communities, so that they can meet the 
requirements of the Clean Water Act and keep local waters 
clean. This program has played a very important role in water 
quality improvements that we have seen across the Country, and 
unfortunately, not seen enough of. Yet the Administration does 
propose a cut in funding for this program as well.
    The small watershed program of the Natural Resources 
Conservation Services provides small but very important water 
supply and flood projects to rural America. The Administration, 
the budget proposed unfortunately does not fund these projects 
at all, so I have some concerns there.
    These programs are, I think, good examples of the kinds of 
investments we are going to have to make to keep our 
environment clean, create jobs and keep up with global 
competition. I don't view these in any way as wasteful 
spending.
    I am confident that the Congress, who does have the 
responsibility to make these choices, will restore some of 
these funds. I look forward to working with both sides of the 
aisle to make certain that we do come up with the best list of 
priorities and that we can move some of the projects I 
mentioned that are so vital to this Country forward. I 
appreciate the Corps and the others, your fine work and 
efforts. We will move forward together.
    Thank you for yielding to me and I yield back the balance 
of my time.
    Ms. Johnson of Texas. Thank you.
    Ms. Matsui.
    Ms. Matsui. Thank you, Madam Chair. Thank you very much for 
calling this important hearing.
    I had hoped today to be welcoming Assistant Secretary 
Woodley, but I understand he has been hampered by the weather 
and Mr. Dunlop is here in his place. I hope you have been 
apprised of some of the discussions that I have been having 
with the Secretary. And I look forward to following up with 
some questions.
    The fiscal year 2008 Administration budget is a good place 
to begin some of the ongoing discussions for both policy and 
budget that this Subcommittee will be engaging in during the 
110th Congress. I am looking forward to these discussions.
    My top priority in Congress is protecting my district from 
flooding. Statistically, Sacramento is a single American river 
city most likely to experience a catastrophic flood in the near 
future. We have to remember that New Orleans was just ahead of 
us, and we know what happened to New Orleans.
    So I am committed to working with my partners at the 
Federal, State and local levels to withstand such an event. 
From a budgetary perspective, these efforts depend on full 
funding for authorized flood protection projects in the Army 
Corps of Engineers budget. I do have several follow-up 
questions that I will be asking you, and I look forward to your 
testimony.
    Thank you.
    Ms. Johnson of Texas. Thank you very much.
    Mr. Boustany.
    Mr. Boustany. Thank you, Chairwoman Johnson. First, let me 
offer my apology for arriving late to this hearing, to the 
witnesses, Chairwoman Johnson and our colleagues on both sides 
of the aisle.
    The work being done by the agencies under the jurisdiction 
of this Committee is absolutely vital to my southwest Louisiana 
district. I am pleased to be here today to talk about the 
Administration's fiscal year 2008 budget priorities. I am 
encouraged that the President's request for the Corps of 
Engineers includes $16 million for operations and maintenance 
along the Calcasieu River ship channel. Our Nation depends on 
Louisiana to meet its energy demands. And within the next 10 
years, 25 percent of all natural gas used in the United States 
will run through my district, actually most of it will run 
through Cameron Parish in the form of liquified natural gas 
being imported.
    Three liquified natural gas facilities are being located on 
the Calcasieu river, in the Calcasieu ship channel, and one of 
our Nation's top ten ports, The Port of Lakes Charles, anchors 
that waterway. Ensuring safe and unfettered navigation along 
this vital ship channel is important, both to our Nation's 
commerce and energy security.
    We are rapidly reaching our capacity to dispose of dredged 
materials along the Calcasieu, which is going to be a major 
problem in the near future. I am encouraged that the 
Administration has included funding for a dredged materials 
disposal facility, and I am eager to learn more about the 
Corps' intended use for this funding.
    We could probably spending an entire hearing talking about 
the beneficial use of dredged materials. I don't want to do 
that here today, but I know that the Corps is currently working 
on its beneficial use program. But it makes sense to me that 
one way to address our disposal limitations along the Calcasieu 
is to use the materials to revitalize nearby wetlands. I 
mention it here today to let the Corps know that this is an 
issue I am very interested in and something I would like to 
follow up on in the near future.
    I am disappointed that there is no funding in the 
President's request to complete the study of replacement 
alternatives for the Calcasieu lock. In the days immediately 
after Hurricane Rita, this inadequate structure of the current 
lock meant that 80 tows waited, costing the economy over 
$400,000 every 24 hours in direct transportation penalties. 
Louisiana just released its latest version of a draft 
comprehensive master plan for a sustainable coast. I know that 
the Corps is working with the State in developing its 
Congressionally mandated program for Louisiana, the Coastal 
Protection and Restoration Project. However, it is not clear to 
me how these two reports will be merged to produce one set of 
comprehensive recommendations. I am hopeful that our witnesses 
can elaborate on this process today as we go forward.
    Last Congress, this Committee passed a study resolution I 
introduced authorizing the Corps to specifically look at 
hurricane protection and flood control needs in southwest 
Louisiana. My main focus at the time was to ensure that 
southwest Louisiana did not get ignored, as much as the focus 
continued to be on New Orleans and the levees. I hope I can get 
an update on the progress of that study as well today.
    I want to make sure that as the Corps works toward the 
completion of the LACPR report, the needs of southwest 
Louisiana are being addressed as well. It is a continual battle 
that I will fight each and every day to remind everyone that 
Hurricane Rita, the forgotten storm, of a similar magnitude to 
Katrina, made landfall in my district just weeks after the 
storm everyone else remembers struck Louisiana and Mississippi.
    So as we begin the fiscal year 2008 budget process, and as 
this Committee moves forward on a new WRDA bill in the near 
future, I want to work with the Administration and Chairwoman 
Johnson to address many of these critical water resources 
issues facing southwest Louisiana, and I certainly look forward 
to your testimony today and thanks for being here with us.
    Ms. Johnson of Texas. Thank you very much. And thank you so 
much for trying really hard to find something positive about 
this budget.
    Mr. Arcuri.
    Mr. Arcuri. Thank you, Madam Chair. I want to thank our 
witnesses for coming before the Subcommittee to provide us with 
a detailed explanation of the President's fiscal year 2008 
budget request.
    The President's budget request is out of touch with the 
needs of the American people. The budget proposal cuts funding 
to programs that provide critical services across the Country. 
In this budget request, the President proposes decreasing 
overall funding for the Army Corps of Engineers by $459 
million, less than the level prescribed by the House-passed 
continuing resolution two weeks ago.
    Each year, heavy rains and subsequent flooding have a 
devastating impact on many upstate New York communities in my 
district. Floods that are only supposed to occur once every 50 
years are occurring far more regularly. For example, the city 
of Oneonta, which I represent, experienced very damaging 
flooding last year due to heavy rains. Consequently, Oneonta 
and surrounding local economies are now bearing the burden of 
this damage, in part because funding for preventive measures 
like those overseen by the Army Corps did not receive adequate 
funding.
    Perhaps if the Army Corps had the necessary funding, it 
would have been able to assist Oneonta. The devastating effects 
of these floods may have been minimized. The floods could have 
been prevented if the city had been afforded sufficient 
resources to assist them in putting the preventive measure in 
place beforehand. That is certainly the view of the local 
officials.
    The President's budget request also proposes taking a step 
back in and addressing America's demand for clean water. The 
President's budget also proposes an almost $200 million cut to 
the Clean Water Revolving Fund, and almost $400 million in 
total cuts to wastewater infrastructure, when compared to the 
sum in the continuing resolution approved last week.
    The State of New York would receive a $43 million cut in 
Clean Water Revolving Loan Funds under this budget request. 
This is not an option. A decrease of this magnitude would 
directly impact our State's ability to repair and modernize our 
aging water infrastructure. These critical funds provide our 
local communities with assistance they need to help with 
repairs and upgrades to damaged water treatment facilities and 
our aging sewer systems.
    The Administration's proposal to lift caps on privately 
issued bonds is not a silver bullet and does not justify or 
soften the effects of slashing funding for the Clean Water 
State Revolving Loan Fund by 22 and a half percent. I am a 
believer that public-private partnerships can work in the 
short-term, but I still remain doubtful that private investment 
will address the long-term sustainable water infrastructure 
needs of communities around the Country.
    I thank the Chairwoman and I yield back the balance of my 
time.
    Ms. Johnson of Texas. Thank you very much.
    The Chair recognizes Mr. Duncan.
    Mr. Duncan. Thank you very much, Madam Chairwoman. As you 
know, after chairing the Aviation Subcommittee for six years, I 
had the privilege of chairing this Subcommittee for six years. 
You were the third one of my ranking members during that 
period, and it was a pleasure and privilege to work with you. 
As I said a few days ago, I know you'll do an outstanding job 
as the new Chairwoman of this Subcommittee. The work of this 
Subcommittee is very, very important. I have said many times 
that there is nothing that the people of this Country take as 
much for granted as our clean water and wastewater 
infrastructure in this Nation.
    So I look forward to continuing to work with you, even 
though I have moved over to become the ranking member on the 
Highway Subcommittee. It was a privilege just for a few minutes 
to sit by you as I substituted for Dr. Boustany, who was 
substituting for Congressman Baker. So I was sort of a third 
stringer there.
    But at any rate, I am pleased to be here this morning and 
want to welcome all of the witnesses. I particularly want to 
welcome General Strock, who has been with us several times 
before and who is an outstanding leader for the Army Corps of 
Engineers. General Strock, I want to say that I am pleased that 
the President's budget contains $35 million to continue the 
construction at the Chickamauga lock. While that is in the 
Third District of Tennessee, Congressman Wamp's district, it is 
much more important to my district and the people of the Second 
District, because of the traffic on the river and so forth. So 
I appreciate that.
    I also want to welcome Tom Kilgore, the Chief Executive 
Officer of the Tennessee Valley Authority. Certainly there is 
probably no agency more important to the people of my district 
than the TVA. Mr. Kilgore has just been doing an outstanding 
job in his leadership role at TVA. TVA is restarting the 
Nation's first nuclear unit at the Browns Ferry site in North 
Alabama. If I understand it correctly, Browns Ferry Unit 1 will 
provide an additional 1,280 megawatts of clean baseload 
generation for the TVA system. TVA has in recent years really 
turned its nuclear generation around and I think that the 
agency needs to be commended for it. We hear so much about 
clean air and global warming and so forth and nuclear power is 
clean and safe and reliable. I think it must play an important 
role in our Nation's energy security and in our efforts toward 
clean air in the years ahead. Certainly the Tennessee Valley 
Authority is spending great sums of money and has been in 
recent years to make sure that the air in our Tennessee Valley 
is very clean.
    I am also pleased that the TVA is doing so much to turn 
around the debt problem that they have had under previous 
leadership in years past. I have to go to the Floor shortly, so 
I am not sure I will be able to hear all of the testimony. But 
I do want to welcome the witnesses, and I thank you, Madam 
Chairwoman, for calling this very, very important hearing. 
Thank you.
    Ms. Johnson of Texas. Thank you very much.
    Mr. Hall.
    Mr. Hall. Thank you, Madam Chair, and welcome to all our 
esteemed witnesses. I am in a position of representing New 
York's 19th Congressional District, and we are bounded on the 
west side by the Delaware, on the east by the Connecticut 
border and close to it the Ten Mile River, and split down the 
middle by the Hudson River. So we have great interest in all of 
the projects that we will be discussing and hearing about from 
you today.
    I just want to say first of all, thank you for the work 
that you do in maintaining our dams and waterways. I would 
imagine that we will try to get you more money to do that work 
than is in this budget, and I believe it will be necessary. I 
can't help but comment on the concept of nuclear power being 
clean, safe and reliable, except when it's not clean, safe or 
reliable, because we happen to have a plant in my district that 
is leaking strontium-90 and tritium into the Hudson River as we 
speak, from two point sources that have not yet been 
identified. There are several upstream communities, town of 
Poughkeepsie, city of Poughkeepsie, town of Wapingers and the 
New York City backup water intake at the Chelsea pumping 
stations, all of which have filtration systems to take river 
water and turn it into drinking water. I am curious, in a river 
that is tidal all the way to Albany, how that might be dealt 
with and still preserve those drinking water supplies.
    But anyway, that is another topic. The water systems, water 
treatment and drinking water systems are very important, and 
flood control also is an issue that we have dealt with several 
of the last years on both the Delaware side and on the Ten Mile 
side where there was significant flooding that caused a lot of 
property damage and financial stress on individuals and also on 
the municipalities. So when we get to questions, I will have 
specifics about that.
    Thank you for being here and I am looking forward to your 
remarks.
    Ms. Johnson of Texas. Thank you, Mr. Hall.
    Mrs. Miller. And after Mrs. Miller, we are going to ask 
everyone to submit their opening statements to the record, so 
we can go right to our witnesses.
    Mrs. Miller of Michigan. Thank you very much, Madam Chair. 
I appreciate that. I will be brief.
    I just want to speak briefly to the Army Corps of Engineers 
budget. Like every budget, there are some things you like and 
some things you don't. But I am concerned in particular that 
the budget request is lacking particularly for funding to 
dredge small and recreational harbors. In fact, recently the 
entire Michigan Congressional delegation sent a letter to the 
Chairman and the Ranking Member of the Transportation 
Committee, as well as the Chair and the Ranking Member on the 
Appropriations, raising a couple of issues in regard to 
dredging along the Great Lakes, the harbors in the Great Lakes, 
about budget guidelines and criteria for dredging of commercial 
harbors that we felt hurt small and rural communities, 
particularly a policy that the Corps has about using tonnage 
handled as a standard for deciding which harbors to dredge. We 
raised that as an issue, as well as unacceptably low funding 
for the Great Lakes harbors.
    So I will, when I get an opportunity under Q&A, talk a 
little bit about that.
    But I also wanted to point out one area I was very pleased 
to discover in the Army Corps' budget as well, and that is a 
proposal by the Corps to authorize a total of $27.4 million for 
the Chicago Sanitary and Ship Canal, the barrier project. Of 
course, the goal of the project is to prevent the movement of 
invasive fish species, specifically the Asian carp, from coming 
up the upper Mississippi River system into the Great Lakes 
system. These carp were originally introduced to control algae, 
actually, in southern fish farms. But then they escaped into 
the Mississippi River during the floods of 1990. Since that 
time, these fish are moving northward up through the 
Mississippi River system and of course have been found in the 
Illinois River which connects to the Great Lakes via the 
Chicago Sanitary and Ship Canal as well.
    Obviously those of us that live in the Great Lakes basin 
there recognize the significant threat that Asian carp are to 
the Great Lakes, for a number of reasons which I won't go into. 
But they really have the potential to have an unbelievably 
catastrophic and negative impact, we think, on the very 
delicate ecosystem of the Great Lakes. So I do see that the 
budget request does talk about an authorization for $11.4 
million for construction improvements to Barrier One and then 
$16 million for Barrier Two. I look forward to hearing from the 
witnesses today about these issues that I have raised and 
others as well, and I appreciate the time to make that 
statement, Madam Chair.
    Thank you.
    Ms. Johnson of Texas. Thank you very much.
    We are pleased to have a very distinguished panel of 
witnesses on our first panel here this morning. And first, we 
have Mr. George S. Dunlop, the Principal Deputy Assistant 
Secretary of the Army Civil Works, who is here on behalf of the 
Honorable John Paul Woodley, the Assistant Secretary of the 
Army for Civil Works, who was unable to get out of his street.
    Unfortunately, Secretary Woodley will not be here, but he 
told me that Mr. Dunlop was more informed than he was, 
probably. So I think he will be very credible.
    And next we have General Carl Strock, Chief of Engineers 
for the U.S. Army Corps of Engineers. And finally, we have 
Administrator Collister Johnson, Jr., of the St. Lawrence 
Seaway Development Corporation. We are pleased that you are 
here and we will begin with Mr. Dunlop.

   TESTIMONY OF GEORGE S. DUNLOP, PRINCIPAL DEPUTY ASSISTANT 
  SECRETARY, ARMY CIVIL WORKS, U.S. ARMY CORPS OF ENGINEERS; 
 LIEUTENANT GENERAL CARL STROCK, CHIEF OF ENGINEERS, U.S. ARMY 
CORPS OF ENGINEERS; COLLISTER JOHNSON, JR., ADMINISTRATOR, ST. 
            LAWRENCE SEAWAY DEVELOPMENT CORPORATION

    Mr. Dunlop. Madam Chairwoman, I really do appreciate the 
opportunity to be here today. I thank you so much for your 
hospitality, on behalf of the Department of the Army.
    It is my pleasure to discuss the President's fiscal year 
2008 budget for the Civil Works Program of the Army Corps of 
Engineers. As you indicated, Mr. Woodley is unavoidably 
detained, and very much does send his regrets, and values the 
personal relationships he has with you and the other members of 
the Committee, and, of course, is always available to the 
Committee to discuss any of these matters with you all 
individually.
    I can report that the budget that the President submitted 
provides a total of $4.9 billion in new Federal funding for 
civil works. This is a 3 percent increase over the fiscal year 
2007 budget, and actually is the most ever included for the 
Civil Works Program and the most requested by any President.
    The budget provides $2.5 billion for the operation and 
maintenance account. This is a 9 percent increase over the 
amount of the fiscal year 2007 budget.
    The budget focuses on construction funding on 69 high-
performing projects, including 6 national high priority 
projects, 11 dam safety and seepage control projects, and 52 
other high-performing projects.
    This budget modifies the construction guidelines that help 
determine the priority of these projects by replacing what is 
called the remaining benefit, remaining cost ratio concept with 
the total benefit cost ratio as a metric to rank these 
projects. The total benefit cost ratio will better measure the 
overall economic performance of the projects. Now, using this 
improved tool from year to year will help ensure continuous 
funding of these high-performing projects.
    The budget includes $40 million to fund preparedness for 
flood and coastal emergencies, and about $20 million to apply 
lessons learned from Hurricanes Katrina and Rita, about $10 
million to continue the national inventory and assessment of 
flood and storm protection projects, and $10 million to 
continue the assessment of dam safety at Corps of Engineers 
dams.
    The budget emphasizes the regulatory program to protect the 
Nation's waters and wetlands through the Clean Water Act, and 
increases funding to $180 million.
    In addition to new Federal funding in the budget, the 
budget also reallocates $1.3 billion in appropriations provided 
in fiscal year 2006 supplemental appropriations to expedite 
increases in the overall level of protection for the New 
Orleans metro area.
    The Administration plans to transmit to Congress draft 
legislation that would authorize the collection of user fees 
for the inland and intracoastal waterways. The proceeds would 
be deposited in the Inland Waterways Trust Fund, and like the 
current tax on barge fuel, would finance 50 percent of inland 
waterway construction and rehabilitation costs.
    This proposal would provide increased annual revenues to 
avoid depletion of the Trust Fund and would also improve, we 
believe, the user pay aspect of the trust fund.
    The budget proposes the replacement of existing continuing 
contracting authority with multi-year contracting authority. We 
believe this would put the Corps contracting processes and 
practices on a basis similar to those of other Federal 
agencies.
    In summary, then, the budget was developed using 
performance based principles that are in line with the 
President's very robust management agenda. Even though it 
provides the highest level of funding ever requested for Civil 
Works in any President's budget, indeed it is a frugal budget 
that reflects the priorities of a nation at war. As in past 
years, it does not fund all the good things that the Corps of 
Engineers is capable of doing, but it does move ahead with many 
important investments that would yield enormous returns to the 
Nation's citizens.
    Madam Chairwoman, Mr. Woodley asked me if I would take this 
opportunity to convey on his part to the Committee the 
appreciation that he has for Lieutenant General Carl Strock, 
for his most excellent service to the Nation, both as a 
valorous soldier and as an outstanding Chief of Engineers. 
General Strock has served as the Chief of Engineers at a time 
of great challenge and difficulty for the Nation and for the 
Corps.
    The magnitude of work that has been undertaken under his 
leadership has been utterly unprecedented when one considers 
the additional scope of work arising from Hurricane Katrina and 
the other hurricane disasters that the Nation faced in 2004 and 
2005, and the enormous scope of the reconstruction projects 
undertaken in Iraq.
    His effective leadership has been instrumental in enabling 
the Corps to effectively manage these challenges in a way that 
has left the Corps of Engineers an organization that is 
stronger and better than it was when he assumed his 
responsibilities.
    So with that, Madam Chairman, we of course appreciate the 
opportunity to be here, and will be responsive to any questions 
that you have to the best of our ability.
    Ms. Johnson of Texas. I know that General, you have been in 
a very key spot during probably the worst disaster we have had 
as it relates to Corps of Engineers in this Country. I must say 
I am impressed with the way you handled it, and I never really 
saw you upset, although I know behind the scenes you probably 
were.
    But I recognize you now for a statement.
    General Strock. Thank you very much, and Mr. Dunlop, please 
express my apreciation to Mr. Woodley for those very kind 
comments.
    Madam Chairwoman and distinguished members of the 
Subcommittee, I am honored to be testifying before you along 
with Mr. Dunlop on the President's fiscal year 2008 budget for 
the Army Civil Works program. If I may, I would like to briefly 
summarize some of the key points of my full statement and with 
your permission submit my complete written statement for the 
record. Thank you.
    This is a performance-based budget that reflects the 
realities of a national budget that must address recent natural 
disasters and the ongoing global war on terror. This fiscal 
year 2008 budget focuses construction funding on 69 projects 
that will provide the highest economic and environmental 
returns on the Nation's investment. The 69 funded projects 
include 6 national priority projects, 11 dam safety projects, 
and 52 other ongoing projects. These projects are crucial to 
the future success of our water resources infrastructure and 
the funding will be used to improve the quality of our 
citizens' lives, contribute to the national economic growth and 
development and to our national security.
    The budget uses objective performance measures to establish 
priorities among projects and proposes changes to the Corps; 
contracting practices to increase control over future costs. We 
believe that focusing our effort on funding and completing a 
more beneficial set of projects will improve our overall 
program performance and would help the Nation realize the net 
benefits per dollar from its investments much sooner.
    The Corps has learned many lessons in the past year and a 
half since Hurricane Katrina struck the Gulf Coast in 2005. The 
lessons learned provide great insights into changes that needed 
to be made with respect to parts of our organizational culture, 
in the planning, execution and life cycle management of 
projects and in how we communicate risks to the American 
people.
    In light of this, I issued my 12 Actions for Change in 
August, in recognition of the need to continue to change our 
organization to better serve the Nation. The 12 actions also 
commit the Corps to ensuring that the American public has the 
information needed to fully understand and make decisions about 
risk when they live behind or near a Corps of Engineers 
project.
    The fiscal year 2008 budget includes $2.471 billion for 
operation and maintenance, and $158 million for the Mississippi 
River and Tributaries Program. I can assure you that I will 
continue to do all that I can to make these programs as cost 
effective and efficient as possible.
    Domestically, U.S. Army Corps of Engineers volunteers from 
across the Nation continue to respond to the call to help 
construct and improve a comprehensive hurricane and storm 
damage reduction system for southeast Louisiana, I should say 
coastal Louisiana. The critical work they are doing will reduce 
the risk of future storms to people and communities in the 
region.
    Over the past year, Corps dams, levees and reservoirs again 
provided billions of dollars in flood damage reduction and 
protected lives, homes and businesses in many parts of the 
Nation following heavy rains. Internationally, the U.S. Army 
Corps of Engineers continues to support the mission to help 
Iraq and Afghanistan build foundations for democracy, freedom 
and prosperity.
    Many U.S. Army Corps of Engineers civilians, each of whom 
is a volunteer, and soldiers are providing engineering 
expertise, quality construction management and program and 
project management in those nations. The often unsung efforts 
of these patriotic men and women contribute daily toward this 
Nation's goals of restoring the economy, security and quality 
of life for all Iraqis and Afghans.
    In closing, the Corps is committed to staying at the 
leading edge of service to the Nation. In support of that, we 
will be working with others to continue to transform our Civil 
Works Program. We are committed to change that ensures an open, 
transparent and performance-based Civil Works Program.
    Madam Chairwoman, this is likely my last appearance as your 
Chief of Engineers, so I want to take this opportunity to thank 
you and the Committee for your efforts in improving our 
national water resources strategies and programs. It really has 
been a pleasure for me to work with you, and I have enjoyed our 
relationship over the years.
    With that, I will conclude my statement and await your 
questions. Thank you, ma'am.
    Ms. Johnson of Texas. Thank you very much.
    Mr. Johnson, you may proceed.
    Mr. Johnson Thank you, Madam Chair and the other 
distinguished members of the Committee. We really appreciate 
your allowing us to be up here and to testify.
    The details of our fiscal year 2008 budget and programs are 
in the formal record. I would like to take a few minutes to 
talk about the Seaway and its importance and how we can improve 
its competitive position.
    The Saint Lawrence Seaway Development Corporation on the 
U.S. side is a wholly-owned Government corporation and an 
operating administration of the U.S. Department of 
Transportation. It is responsible for the operations and 
maintenance of the U.S. portion of the St. Lawrence Seaway 
between Montreal and Lake Erie. This responsibility includes 
maintaining and operating the two U.S. Seaway locks located in 
Massena, New York, and vessel traffic control in the areas of 
the St. Lawrence River and Lake Ontario. In addition, the 
Seaway Corporation performs trade development functions 
designed to enhance awareness and use of the Great Lakes St. 
Lawrence Seaway system.
    The SLSDC coordinates activities with its Canadian 
counterpart, particularly with regard to safety, rules and 
regulations, environmental programs and the overall day to day 
operations of the Seaway. I think it is important to note, 
Madam Chair, this is a binational seaway and we have 
responsibilities to our Canadian partners.
    The U.S. Seaway Corporation has assets exceeding $160 
million, which includes locks, navigation equipment, buildings 
and other equipment and supplies necessary for the operation of 
the Seaway. Our agency is somewhat unique within both the 
Department of Transportation and the Federal Government in that 
we are directly responsible for operating and maintaining fixed 
perpetual assets. So we are not a regulatory agency, we are not 
a grant agency, we are an operating agency, and therefore need 
to be funded accordingly.
    Maritime commerce on the Great Lakes Seaway System is a 
critical transportation link for the continent's agricultural 
and industrial heartland, annually sustaining more than 150,000 
U.S. jobs, $4.3 billion in personal income, $3.4 billion in 
transportation-related business revenue and $1.3 billion in 
Federal, State and local taxes. Since opening in 1959, more 
than 2.4 billion metric tons of cargo has been transported 
through the St. Lawrence Seaway with an estimated value of more 
than $400 billion. During the 2006 navigation season alone, 
47.2 million metric tons of cargo, mostly grain, iron ore, 
steel and other bulk commodities, passed through the Seaway, 
representing a value of $7.7 billion.
    The bi-national Seaway is expected to become an even more 
important commercial transportation route over the next decade 
as the U.S. and Canadian governments seek ways to ease highway 
and rail congestion, especially along North America's East and 
West Coasts and Midwest region. In the past few years, the St. 
Lawrence Seaway has enjoyed significant growth in new business 
as waterways become a viable alternative for shippers looking 
to avoid port, highway and rail congestion. But even with that, 
the Seaway only operates at about 60 percent capacity, and that 
is one of the few modes, I believe, in the United States, that 
can make that statement and therefore, offer solutions for 
congestion.
    Of particular interest to this Subcommittee, the U.S. Corp 
of Engineers is expected to release later this year its final 
report on the recommendations for the future viability of the 
Great Lakes St. Lawrence Seaway System, including an 
engineering analysis that will provide the two seaway entities 
and policy makers with a detailed framework for projects, and 
most importantly, for the costs that are required to keep the 
Seaway lock infrastructure in excellent working condition for 
the next 50 years.
    The final report, Madam Chair, scheduled to be completed in 
July, will detail the conditions of the various assets of the 
Seaway, which for the most part were acquired in the late 
1950's and early 1960's. Many of these assets are showing signs 
of wear, and are urgently in need of technological and physical 
upgrades.
    In many cases, the Seaway infrastructure assets, including 
locks, bridges and tunnels, have not been renewed at a level 
sufficient to perpetuate these assets. And that raises the 
specter, Madam Chair, as you pointed out, of catastrophic 
failure. And if that were to occur in the Seaway, because it is 
a single lock system, everything in the transportation route 
between Duluth and Montreal would be shut down if we failed. 
That may be of interest to Mr. Oberstar.
    So once this report is completed, we will be back in touch 
with this Committee to talk about our needs.
    Thank you again for the opportunity to testify and I would 
be pleased to answer any questions.
    Ms. Johnson of Texas. Thank you very much.
    We are going to begin our first round of questions with 
people that didn't get a chance to make opening statements. Mr. 
Costello is recognized.
    Mr. Costello. Madam Chair, thank you very much. I will be 
very brief. I have one question.
    General Strock, it is good to see you again. Thank you for 
being before the Subcommittee.
    As you know, you are very familiar with the St. Louis 
region, we have a collection of individual levee districts that 
provide flood protection in the region. If one of those levees 
fails, it will have a severe impact on the adjacent levees 
along with various levels of impact for the entire region. 
While these levee districts, as you know, are dependent upon 
each other for system protection, they are not managed by a 
system. And I am wondering if you can state for the record how 
the Corps is approaching the need to manage these collections 
of individual levees as a flood protection system?
    General Strock. Yes, thank you, sir. As a result of the 
hurricanes that struck the Gulf Coast earlier in 2005, we 
developed a set of 12 Actions for Change. One of the most 
important actions is to embrace a systems approach to how we do 
the work. We must look at these systems not as discrete 
elements, but rather as how they interact and are 
interconnected. So while we don't have any specific authorities 
to do that now, we certainly recognize the value in considering 
them as a system.
    Mr. Costello. I am not clear on your answer, actually.
    General Strock. Well, sir, I think there are some 
legislative fixes to that. I think as an example in Louisiana, 
the State has taken it upon themselves to create an overarching 
State body that will oversee the efforts of the various levee 
districts within the State. That sort of thing will certainly 
contribute to our ability to operate as a system.
    Mr. Costello. So your suggestion would be that the State of 
Illinois would come in and pass legislation to try and address 
this issue?
    General Strock. I wouldn't suggest that, sir, but I am 
saying that is how the State of Louisiana has attacked a 
similar problem down there.
    Mr. Costello. And in that case, did the Corps work with the 
State of Louisiana to work with them to come up with a plan?
    General Strock. Indirectly, I did. We were informed of 
their plans and we understood the implications for the Corps as 
a result of those, yes, sir.
    Mr. Costello. Very good. Thank you, General. Thank you, 
Madam Chair.
    Ms. Johnson of Texas. Thank you.
    The Chair recognizes Mr. Mack.
    Mr. Mack. Thank you, Madam Chairwoman, and also thank you, 
all of you, for being here this morning. I too will be brief in 
my questions to give you the opportunity to speak to the 
issues.
    First of all, I would like to know what you believe the 
current health and status of the Lake Okochobee in Florida is. 
The Lake Okochobee is vitally important to the health of the 
Everglades system and to all our quality of life in Florida. 
Also what the current situation with the Herbert Hoover dike 
surrounding the lake is. Basically want to know if we are safe 
if a hurricane comes through, and will the dike be able to hold 
the water.
    And finally, take a few minutes to address an important 
issue for me and then for my district, and for all of southwest 
Florida, and that is the C43 Reservoir and the PIR that is 
going to determine the future construction plans of the 
reservoir. Obviously we are eager to see this move forward 
quickly, so we can see some relief for the river and for the 
ecosystem and for our quality of life in southwest Florida.
    Thank you.
    General Strock. Sir, the state of health of the lake is not 
good. As a result of the hurricanes in 2004 and 2005, we had 
tremendous inflows into the lake, which caused large 
discharges, high turbidity within the lake and very high 
phosphorus levels. We had extensive loss of vegetation and 
major damage to the fisheries, so the state of health of the 
lake is not good.
    As far as the safety of the Herbert Hoover dike, we are 
concerned about its structural integrity, but we do not see it 
as being in danger of imminent failure. We are able to control 
the safety through carefully regulating the levels of the lake, 
down to hundredths of a foot. And during the hurricane season, 
I get direct reports on that level within the lake. So we are 
able to control it.
    But it does need to be rehabilitated. We have recently 
revised our study and recommendation on that rehabilitation 
with a considerable increase in the scope of that. This budget 
allocates $56 million to begin the work in fiscal year 2008. So 
I do not see an immediate threat to the safety of the people of 
South Florida as a result of the condition of the Herbert 
Hoover Dike, but it does need to be fixed.
    As far as the C43 Reservoir is concerned, we are attempting 
to, we are putting the pilot project in there for aquifer 
storage and recovery. That project did not work as we had 
hoped, and we are looking now for an alternative site for the 
well that we will use to continue that pilot project. And with 
the success of that, that will drive then what we do with C43 
and the rest of the general program of aquifer storage.
    Mr. Mack. Thank you for your answers. Two things come to 
mind. One is, as you talk about changing the level of the lake, 
that has a direct impact on the Colusahatchee River and this 
reservoir.
    General Strock. Yes, sir.
    Mr. Mack. So what I would like to hear is that the PIR is 
moving forward and that you plan on having that done soon so we 
can then begin the construction of the reservoir that I think 
we all agree will help with the quality of water that flows 
down through the Colusahatchee River that is killing the 
estuary.
    General Strock. Sir, we will finish phase one of the PIR 
this summer. That will allow us then to initiate phase two. So 
I think we are moving along about as quickly as we can. The 
phase two effort will address the additional storage needs and 
water quality needs for the basin. So I think we are moving 
along as well as we can on the PIR.
    Mr. Mack. Thank you very much. Thank you, Madam Chairwoman.
    Ms. Johnson of Texas. Thank you.
    Mr. Bishop.
    Mr. Bishop. Thank you, Madam Chair.
    Thank you very much for your testimony, gentlemen. I have a 
couple of specific questions, but first overall, I am very 
concerned about the overall funding level for the Army Corps, I 
think an 8.6 percent cut in funding from fiscal year 2007 and 
the CR is ill-advised. I am also troubled by the prohibition on 
new starts.
    I want to focus on two specific things. I represent eastern 
Long Island, so my district has about 300 miles of coastline. 
The first area I want to pursue is the Fire Island to Montauk 
Point reformulation study. As I understand it, the amount of 
money included in the fiscal year 2008 budget is $750,000 to 
complete the study. And I am pleased that there is money in the 
budget to complete the study. This is the fifth budget that I 
have been a member of Congress for, and three of the five did 
not include any money for the reformulation study. We had to 
work with the appropriators to see to it that that project 
remained funded.
    But my question is specifically, is the $750,000 sufficient 
to complete the study?
    General Strock. I don't have that information immediately 
in front of me.
    Sir, the answer is yes. It is sufficient to complete the 
study.
    Mr. Bishop. OK, thank you very much. And I am glad, many of 
us on Long Island anxiously await the results of that study, so 
that we can begin to have the framework that we need to make 
the decisions to protect our shoreline.
    Secondly, I am troubled by the continued prohibition on the 
Corps being involved in beach renourishment projects. Just to 
be specific, as part of the Army Corps Fire Island to Montauk 
Point reformulation study, there is $2.6 million in the budget 
for the court-ordered beach renourishment at Westhampton Dunes. 
Now, there is no way that the Village of Westhampton Dunes 
could undertake that project on their own. The scope of the 
project is such that it requires a Federal role. That project 
is not unique.
    So I guess my question is, is it realistic to think that 
local government can take on the role of beach renourishment 
projects, and does it not, if we say yes, it is only up to 
local government, does that not expose our shoreline and our 
inner shore areas to the kind of Katrina-like devastation that 
we have unfortunately seen?
    General Strock. Sir, as I recall, the court-ordered 
renourishments I think are an exception to that policy. I think 
the Federal Government remains committed to those court-ordered 
renourishments.
    Mr. Bishop. I am sorry, repeat that again, General Strock?
    General Strock. It is my understanding that the Federal 
Government does have responsibility for the court-ordered 
renourishment.
    Mr. Bishop. We are in full agreement on that. I am just 
using that as------
    General Strock. For the general discussion, yes, sir, it is 
our position that we will participate in the initial placement 
of the protective sand on a beach, but that the follow-on 
replenishment of that sand is a local responsibility. That is 
principally driven by the lack of available funding to do that.
    Mr. Bishop. I understand that that is your position. My 
question is, is that realistic? I mean, are we not turning a 
blind eye to a potentially devastating problem?
    General Strock. I think each case has its own merits. In 
some cases, beach communities have the resources to provide 
that renourishment, in others, they do not. So it is 
situational, to answer that.
    Mr. Bishop. Thank you for your testimony. I yield back.
    Ms. Johnson of Texas. Thank you very much.
    Mr. LoBiondo.
    Mr. LoBiondo. Thank you, Madam Chair.
    Thank you for being here today, to our panel. I would like 
to follow up on Congressman Bishop's comments. I feel, I will 
try to choose my words carefully, but I can't tell you how 
troubled I am with the position that the Administration has 
taken by again deciding that shore protection projects and 
their renourishment cycles will not receive funding. This just 
makes no sense to me. It comes despite the fact that these 
projects are fully authorized by Congress and the Corps and 
non-Federal sponsors have entered into signed project 
cooperation agreements with a lot of people doing a lot of work 
and renourishment is critical by almost any measure that you 
want to take.
    Coastal erosion places homes and businesses of not just my 
constituents, but obviously of Congressman Bishop and many 
members of Congress, at a serious risk. And we have seen that 
the Administration has apparently decided that somehow it is 
cost effective to spend billions of dollars with FEMA in 
disaster relief to replace homes and business after the next 
storm, but not to spend the millions of dollars to do the 
renourishment projects. Each of us, many of us have districts 
that rely on this. And as Congressman Bishop said, these 
individual communities, you are in essence saying the projects 
can't be done. These small communities cannot afford to foot 
the bill to do these renourishment projects.
    I am really troubled by this. And I would like to know, 
Congress has included funding for renourishment projects in the 
2006 Energy and Water Appropriations Bill. Given the rules you 
are developing for the 2007 continuing resolution, can you tell 
me whether renourishment projects will receive funding?
    Mr. Dunlop. Congressman, it is my understanding that the 
type of renourishment that would receive funding when we come 
up with the work plan, the allocations which have not yet been 
completed for fiscal year 2007--that when projects are Federal 
projects, when there is a renourishment activity that is needed 
to protect a Federal project, that that would be under 
consideration for that allocation.
    But it is a policy decision that has been made that the 
other things that you are referring to would not be included. 
And I understand what you said, I will take the message that 
you have about the rationale and the earnestness that you feel 
about it, and we will continue to take that under advisement. 
But right now, it is my understanding that unless it is 
directly related to a Federal project that those allocations 
would not be there.
    Let me do check, though, to make sure that I have not over-
spoken. And I think I have had this, that is, the additional 
confirmation that has been provided to me is that renourishment 
would be budgeted, if it has been caused by a Federal 
navigation project, in other words, if some work that we have 
undertaken has resulted or had a consequence, an unintended 
consequence, of causing beach degradation, then that is when we 
could participate. That is what I am advised is what our 
allocations will look for.
    Mr. LoBiondo. Well, I can't tell you how upset I am with 
hearing this. You are dooming I don't know how many communities 
along all of our coast. And when property is lost or more 
importantly, when lives are lost because a storm comes in, and 
these communities couldn't keep up with this, the Federal 
Government is going to be coming in and picking up the tab. If 
you are worried about spending dollars and being cost 
effective, this is just about as stupid as it gets in my book. 
I hope that this Committee continues to make a strong 
statement. I hope this Congress continues to make a strong 
statement. And in this particular case, I hope that you can go 
back and report how strongly at least some of us feel that this 
policy has to be overridden. This is disastrous for us.
    Mr. Dunlop. I understand what you have said, sir. I will be 
faithful to that. As I have stated, the work plan has not yet 
been determined, so these are matters that we will continue to 
take under advisement, as you have asked us to do.
    Mr. LoBiondo. Well, I hope you strongly reconsider as you 
put this together. I just can't believe, we go back to our 
communities and tell them that the Federal Government is 
abandoning them and then another storm comes in, whether it is 
the East Coast or the West Coast or the Gulf Coast, and you are 
going to come in and pick up the pieces at a much higher price 
tag. It doesn't make any sense.
    Thank you, Madam Chair.
    Ms. Johnson of Texas. Thank you very much.
    Ms. Hirono.
    Ms. Hirono. Thank you, Madam Chair. I have a question for 
General Strock. The Army Corp Civil Works projects are of 
critical importance to my second district of Hawaii, which 
consists of seven inhabited islands. Except for Oahu, these 
islands are rural in nature, and the residents and businesses 
rely on our harbors for commerce, fishing and recreation. We 
also rely on the Army Corps to assist in important flood 
control and ecosystem restoration projects.
    I am especially grateful to the Corps for its assistance in 
studying the safety of the many dams in our State after the 
tragedy at Ka Loko Dam on the island of Kauai, which resulted 
in several deaths, property losses and ecosystem damage. I want 
to inquire in particular about a project that has been a very 
high priority for the Hawaii delegation for many years. That 
project is the Kikiaola light draft harbor on the island of 
Kauai. This is a much-needed and long-authorized project that 
is ready to proceed to construction. I understand that this 
project has been delayed due in part to the reprogramming of 
some $10 million in funds that were earmarked for the project 
over the past 25 years.
    Senator Inouye was successful in securing an earmark of 
$13.5 million in fiscal year 2007 in the Energy and Water 
Appropriations bill for the project, which would have allowed 
construction to move forward. However, as the bill did not 
become law, I am concerned about the future of this project. 
Will the Army Corps provide the needed funding to finally move 
to construction this project from the funds provided and the 
fiscal year 2007 continuing resolution?
    General Strock. Ma'am, you are correct, we had hoped to 
move to construction in September of 2005. But the bid climate 
in Hawaii made it such that we were unable to do that. The 
project is owed $10 million in payback, and we are continuing 
to seek a source for that payback, but we do not have it.
    As far as the work allocation for 2007, as Mr. Dunlop 
mentioned, we are awaiting the final form of the funding 
resolution and guidance from the Administration on how to work 
the 2007 program. But we will certainly do everything we can to 
move Kikiaola forward.
    Ms. Hirono. It is a long time coming. So I appreciate your 
pushing it as hard as you can.
    General Strock. Yes, ma'am.
    Ms. Hirono. Thank you.
    Ms. Johnson of Texas. Thank you very much.
    Representative Ehlers.
    Mr. Ehlers. Thank you, Madam Chair.
    I have a few questions about the Great Lakes harbor 
dredging. It will come as no surprise to you that several of my 
colleagues from Michigan and the other Great Lakes States are 
very concerned about the persistently low level of funding for 
dredging Great Lakes harbors. Our region currently faces a 
backlog of over $200 million in operations and maintenance 
projects. This has led to vessels on the lakes being forced to 
carry lighter loads for fear of shallow harbors and channels. 
This has delayed cargo shipments, drives up costs 
significantly.
    We are particularly concerned about the inequities of this. 
For example, in fiscal year 2005, the Ohio River received over 
$266 million for dredging, which is about $1.10 per ton of 
cargo. The Great Lakes only received $87.5 million, which is 
about 50 cents per ton, less than half. We dropped down to $74 
million in fiscal year 2006. And I certainly don't want this to 
become a battle between regions, but that certainly seems 
inequitable, when we are receiving less than half as much per 
ton of cargo transported than other areas are.
    I noticed that it gets bumped up to $105 million this year, 
but it is not clear to me that this is for the Great Lakes, or 
is because the Indiana harbor combined disposal facility, a $20 
million project, was moved over from the construction account. 
So my question is, what plans do you have to start to tackle 
the backlog in maintenance projects of dredging that is causing 
such a problem for the shippers on the Great Lakes, and do you 
distinguish between navigation projects designed to move 
domestic cargo and those designed to move import and export 
cargo, and do you distinguish between those two at all or not? 
I might add, it is complicated by the fact that lake levels 
have fallen drastically since 1998. It makes the need for 
dredging even more urgent.
    General Strock. Sir, certainly where the allocation of 
funding goes, we do not discriminate between regions. We do not 
do a head to head competition between the Ohio River and the 
Great Lakes or any other region. The Lakes and Rivers District, 
like all of ours, has a budgeting process that is risk based. 
So each project and each situation is taken on its own merits.
    As you had mentioned, the result of that was an increase in 
the Ohio River, and I can't tell you categorically whether it 
was due to Indiana Harbor or not. We will look into that, sir.
    But certainly the Ohio River increased by 12.6 percent and 
the Lakes increased by 8.8 percent, a difference. But it was a 
bottom-up driven budget that took that business line approach
    [The information received follows:]

         The increase in Operation and Maintenance funding for the 
        Great Lakes and Ohio River Division is primarily for critical 
        maintenance on the mainstem Ohio River. The Indiana Harbor 
        Confined Disposal Facility also was included in the Operation 
        and Maintenance account in the FY 2007 budget.

    Mr. Ehlers. I don't understand that term, bottom-up. Are 
you talking about the bottom of the river?
    [Laughter.]
    General Strock. No, sir, in terms of the organization. The 
districts within the Lakes and Rivers Division made the case 
for each of their projects against a set of criteria, and that 
then moved upward as we allocated the available funds. Their 
defense of their requirements was taken into consideration. 
That is what I mean by a bottom-up driven analysis.
    In terms of the import-export, I will have to answer that 
offline, sir, I do not know the answer to whether we make a 
discrimination on that or not.
    [The information received follows:]

        Allocations to navigation projects were not based on 
        distinctions between those that move domestic cargo and those 
        that move import and export cargo.

    Mr. Ehlers. OK. Well, I certainly appreciate your checking 
into that, because it has become a major problem for the 
shippers on the Great Lakes, particularly Lake Michigan and 
Lake Superior.
    The other comment I wanted to make, I understand in her 
opening statement Mrs. Miller from Michigan raised the issue of 
the barriers. That is a crucial issue. I can't imagine anything 
which would be more damaging to the Great Lakes ecosystem than 
having the Asian carp get into the lakes. We absolutely have to 
stop that. I think it is to the point that if you can't get the 
dispersal barriers going up and operating regularly and 
faithfully, certainly, then we ought to close off the Chicago 
drainage canal and just make sure nothing gets up. But of 
course, the city of Chicago would be in terrible shape if that 
happened.
    So it just absolutely has to be addressed. I think that has 
to be the highest priority project of anything that you do. So 
I certainly support Mrs. Miler's comments on that.
    Thank you very much.
    Ms. Johnson of Texas. Thank you very much.
    Mr. Carnahan.
    Mr. Carnahan. Thank you, Madam Chair, and welcome to our 
panel.
    First I want to just continue on the add my voice of 
concern that we have heard in a bipartisan way here today that, 
does it make sense for us to be penny-wise and pound-foolish 
with this budget. I hope we will look at that in the broader 
context.
    To General Strock, I want to say thank you. We have talked 
many times about river issues that surround my district in the 
St. Louis region. I am right across the river from Congressman 
Costello, at the confluence of the Mississippi, the Missouri 
and the Illinois Rivers. So we have some great national 
treasures around us and appreciate your work with regard to 
them.
    I want to echo Congressman Costello's comments about the 
need to look at the systems management approach to our levees 
around the region and look forward to working with you on that.
    Secondly, I want to also mention the formerly utilized 
sites remedial action program. Two of those sites are in the 
St. Louis region. It is important we continue those. I am 
disappointed to see the funding down from 2007 levels. As you 
know, these are sites that were mostly contaminated as a result 
of our early efforts to develop nuclear weapons, atomic 
weapons. So we need to finish that work.
    Finally, I want to talk about the St. Louis floodwall. 
During the great flood of 1993, as we all know, that floodwall 
nearly failed. At risk there in St. Louis is an estimated $3 
billion worth of residential, commercial and industrial 
property. It has been 14 years since that great flood. It has 
been since 1955, three years before I was born, I might add, 
that that project was authorized. Yet this is being put in a 
category of new projects, new construction. And my question is, 
how can that be put in a category of new construction, number 
one, and number two, given the severity of the property at 
risk, how can we go forward to get that and make that a 
priority?
    And with regard to the local initiatives, there are many 
new initiatives to improve our riverfront as a top priority for 
St. Louis. We have taken a local initiative to come up with 
local bonding funds to help that. But the Federal Government 
has to do their part.
    General Strock. Sir, I certainly share your frustration 
over the time it has taken to bring this to resolution. We do 
understand the nature of the problem, and it really can be 
resolved by installation, by replacement of the relief wells. 
Perhaps not a satisfactory answer, but the policy is that if 
the construction is a result of a design deficiency, which this 
is, then it is characterized as new work. That is simply the 
way the system works, so it must compete in that category. But 
we are prepared to move ahead for construction in 2008, if this 
is funded.
    Mr. Carnahan. Well, we need to continue to work on that. As 
we have talked many times, and with other representatives from 
the Corps, this is one of the top priorities. When you look at 
the property at risk, it certainly should be in a top priority. 
So we appreciate that, and we will continue to work with you.
    General Strock. Yes, sir.
    Ms. Johnson of Texas. Thank you very much.
    Congresswoman Drake.
    Mrs. Drake. Thank you, Madam Chairwoman.
    Gentlemen, thank you for being here, especially on such a 
difficult day. I would like to join the chorus of talking to 
you as well about beach replenishment. I think in Virginia 
Beach, we have all seen that that project did do exactly what 
it was supposed to do when Hurricane Isabel came in. I know we 
are very close to being able to finish that work.
    My question for you deals with the Supreme Court ruling 
last year in Rapanos that Section 404 program overstepped its 
authority under the Clean Water Act. The Court ruled in a 
decision that to claim jurisdiction there must be significant 
nexus between the wetland and a navigable body of water. This 
decision did little to clarify any possible confusion on 
Section 404 because of the 441 ruling that was issued.
    So the result is, companies are making business decisions 
based on circuit court decisions and interpretations, using 
Justice Kennedy's significant nexus test to assert jurisdiction 
over waters some distance from navigable streams. I believe the 
agencies need to issue guidance to the field staff and 
regulated industries, rather than companies making decisions 
based on very limited court rulings. So my question is, is this 
guidance coming and what can we expect?
    Mr. Dunlop. Yes, ma'am, the guidance is coming. We are 
obliged by the Supreme Court when they make decisions that add 
new factors into the consideration of what is jurisdiction. It 
is a complicated ruling. It is taking us much greater time to 
bring together the ways to accomplish what the Supreme Court 
has determined than we thought it would. I do think it is safe 
to say that the guidance that we expect to provide to the field 
to assure that we have consistency and predictability and that 
we are consistent with the Supreme Court rulings--and we factor 
in the considerations of, as you said, significant nexus and 
other factors that the Court has determined are necessary in 
this--that it is, if I used the term imminent it would not be 
overspeaking, that are very eager to accomplish this at the 
earliest possible time.
    Mrs. Drake. I appreciate that. Can you also tell me what 
the basis would be, or if it is just like talking about the 
beach replenishment, how you are going to decide what ongoing 
projects are going to be funded with the CR for the 2007 
funding?
    Mr. Dunlop. Well, I might ask General Strock perhaps to 
address the particulars of that. But as I did indicate 
previously, these allocation decisions are still under 
consideration. Until we settle all of those things out and look 
at the way that we have to deal with this CR, it would really 
be speculative for me to say anything specific about that.
    I could ask my staff if there is a particular thing I might 
add to that. They confirm that we are working earnestly on 
this, and that at the earliest possible time we will try to 
deal with these allocation decisions.
    Mrs. Drake. Then let me ask General Strock, if the 
President's budget request is above what was requested in 2007, 
as you said, so will you be able to address all expected 
maintenance needs? How much deferred maintenance do you think 
we are going to be incurring for what the current backlog is 
going to be for maintenance as well? Even though it is an 
increase, where do you think we are with that?
    General Strock. I don't have those figures available to me 
now, ma'am. I can answer that either offline or for the record. 
But as Mr. Dunlop says, our approach to the 2007 funding 
certainly would not be able to meet all the maintenance needs. 
We will address the critical needs first, obviously. And again, 
when the joint funding resolution is passed and we see what 
that looks like and what guidance it provides, and what 
guidance we get from OMB, we will finalize the 2007 work plan.
    Mrs. Drake. Thank you very much.
    Madam Chairwoman, I yield back.
    Ms. Johnson of Texas. Thank you very much.
    Ms. Matsui.
    Ms. Matsui. Thank you, Madam Chair.
    Mr. Dunlop, I have been in discussion with Secretary 
Woodley and I have a question. For areas like Sacramento that 
have many budgeted and ongoing flood protection projects, it is 
really difficult to look toward fiscal year 2008 budget until 
one fully understands the status of the CR and fiscal year 2007 
budget situation. So for high risk flooding areas, can you 
explain how these critical decisions for at-risk populations 
will be made?
    Mr. Dunlop. Congresswoman, I have not been involved in the 
discussions about that to the degree that Mr. Woodley has. I 
think that anything that I might say in that regard might just 
confuse the issues, because I am really not informed about 
that. What I would like to do is, in specific response to your 
question, to respond to that either by having Mr. Woodley have 
a discussion with you personally about it, to come see you or 
speak to you on the phone, or for us to provide a written 
statement that would address the specifics of what you have 
raised.
    Ms. Matsui. That would be very helpful.
    I have a more general question here, then. For the CR, the 
fiscal year 2007, the Army Corps has $2.3 billion to spend on 
construction for projects. In fiscal year 2008, the 
Administration has recommended $1.846 billion in construction. 
If $2.3 billion cannot take care of our Nation's needs, how can 
we expect the fiscal year 2008 budget numbers to come close to 
meeting, let alone sustaining our Nation's needs?
    Mr. Dunlop. In a general sense, of course, what is public 
policy but the allocation of available resources? And you know, 
as General Strock and as many of you have said in your opening 
statements, the opportunities that we have to improve the water 
resources infrastructure of this Nation are great. And it is 
really very difficult. That is why we have assistant 
secretaries and why we have budgets and why we have Congresses 
that ultimately have to resolve these issues.
    But the processes that we use seek to prioritize, in the 
very best way we can, in an open and transparent way, what the 
principles and the priorities and the practices are that would 
allow us to use the proper decision making processes to rank 
the ways in which we allocate these resources. It is a tough 
job and we are all engaged in it most vigorously. Ultimately, 
when we have more will than we have wallet, there just has to 
be a way to resolve those things.
    The process that we are engaged in here in hearings, and 
other oversight that the Congress engages us with, help inform 
these processes greatly. We take it very, very seriously when 
elected representatives of the people emphasize what is 
important to them. And then we weigh those considerations 
against the matrices that we use so that we have an open and 
transparent way to help allocate these resources.
    Ms. Matsui. My concern, Mr. Dunlop, is that we have had 
ongoing projects for years. And we have decided on a direction. 
Most of this depends upon meeting capability. That is why I am 
concerned about where we are with the CR. Because if we use the 
2006 numbers, we are certainly below capability. If we are 
looking at 2008, we need to look to see what we are doing in a 
CR, in order to stay on track. And even at that, from what I 
understand with the fiscal year 2008 budget on basically my 
projects, for instance, there is $66 million for various 
projects like the American River watershed, the Sacramento 
River bank protection and the South Sacramento streams. I have 
been advised that the Corps capability for these projects is 
approximately $100 million higher.
    So we are looking ahead, trying to finish these vital flood 
control projects in a rational, reasonable manner, 
understanding that we would like to get this done within 10 
years. And yet we have no understanding about what the 
rationale is, how we interface with you in order to find out 
how you make these critical decisions. You indicated that you 
have not been as involved in this process and I will certainly 
follow up with Secretary Woodley. But you have to understand 
that all of us here are very much focused on how our projects 
are going to be placed as far as the CR in the 2008. Because we 
are looking forward to many more years than that.
    So it is something that I think all of you have to 
consider.
    Mr. Dunlop. Yes, ma'am. We understand exactly. And of 
course, the definition or the use of the term capability is 
something that from an engineering and construction and other 
allocation and mobilization of assets that we have in the 
Government--the people that work for the Corps of Engineers in 
a contracting capacity--is a very useful term.
    But when we talk about capability outside of that 
engineering context, it can be somewhat confusing. Because 
while my understanding of these terms like capability and other 
things is not entirely perfect, it is my understanding that it 
assumes that there are no other constraints, there is no other 
work that is being asked to be done by the same people. So when 
we look at a number like, well, we have capability to do X, it 
is almost like we are looking at that particular project and 
not looking at any other activity that would need to be 
addressed by the same people that would be doing that work.
    So as we talk with you and gain a better understanding 
about how we can properly allocate available resources there, 
this gaining a better understanding of exactly how these 
capability concepts affect the area in which you are 
interested, in the Sacramento and the American River and all 
those other areas there, will be something I think will be a 
very useful discussion for all of us.
    Ms. Matsui. Thank you. I must say that I have been really 
involved in this for a very long time. So I understand what 
capability means. And it is just a sense of trying to get to 
how you make a decision.
    Thank you, Madam Chair.
    Ms. Johnson of Texas. Thank you. Mr. Brown.
    Mr. Brown. Thank you, Madam Chair, and thank you, 
gentlemen, for coming in and making these presentations this 
morning.
    I represent the First Congressional District in South 
Carolina, which is on the coast, so I will echo some of the 
concerns that we have with some of my counterparts along the 
coast about beach renourishment. It seems like to me that the 
Corps and I guess the Administration has given up on 
renourishing our beaches. I am just concerned about the benefit 
cost ratio between prevention and the benefits of having sand 
on the beaches, particularly when we have a storm or national 
disaster come through.
    I am just wondering, if in effect you are incorporating 
that into the former to help us generate the need for 
continuing beach renourishment?
    General Strock. Sir, the formulation of the benefit cost 
ratio does take into account the damages that occur if that 
protection was not in place. So in that respect, it does. In 
terms of the other aspect of this, the fact that we do not 
support beach renourishment, you can begin to get into the 
argument about whether the damages avoided would not be worth 
the cost to the Federal Government of renourishment. But as 
mentioned, with the shortage of funding, we simply have to draw 
the line somewhere. We have committed to the initial 
nourishment of those projects which meet the criteria and leave 
the renourishment to the local population.
    Mr. Brown. We have even had to go to FEMA to help 
reconstruct the beaches after the storms come through. It seems 
like to me that is kind of reversing the priorities in the best 
cost methods, using the taxpayers' dollars. I would certainly 
encourage you to take another look to see if we can't change, 
reach the direction in which we are going to address that 
particular problem.
    A big problem we have down along the cost is the need to 
get permits during construction projects. I was just curious, 
after the Carabell/Rapanos decision, are you moving forward on 
enacting those permits? I know we have some 20 to 25 different 
corporations just waiting for an answer to move forward on some 
construction projects.
    Mr. Dunlop. Yes, sir. It is my understanding that the 
policies that we have, in regard to permits that are being made 
of the sort you described, is that until there is more 
guidance, which Congresswoman Drake was asking about earlier, 
the current policy is for any project applicant, any person who 
wants to use his property and needs a 404 permit, if he is 
willing to accept jurisdiction on that, we will immediately 
process that permit and accept that jurisdiction. And then of 
course the factors that would be considered for the permit 
would be the typical ones that involve mitigation, whether they 
can avoid, minimize or compensate for their impacts on the 
aquatic resources of the United States.
    If people are not willing to accept jurisdiction, they say, 
well, gosh, there was this Supreme Court decision, we may not 
even be jurisdictional, then we have had to withhold dealing 
with those permit applications right now. So they are on hold. 
There is a backlog building because of this. It is a 
significant factor and we are most eager to get our guidance 
out into the field so that we can begin to deal with this 
mounting backlog.
    Mr. Brown. Well, it is a real serious problem in my 
district. We have smaller contractors that get financial 
commitments on the cost of that property and they are paying 
interest, and those interest costs continue to build. I would 
hope in some timely time line that you would be able to make 
that determination.
    Mr. Dunlop. Yes, sir. In fact, as I responded to 
Congresswoman Drake, I don't think it is an overstatement to 
say that it is imminent. I would say, however, if you had asked 
me that in July, I would have said it is imminent. It is very 
difficult to come up with the types of guidance that cannot 
have unintended consequences of causing further litigation, and 
therefore further delays for everybody. But I do really think 
that we are very close to this, and certainly will take the 
admonishment that you have to help move this through------
    Mr. Brown. When was that ruling made?
    Mr. Dunlop. I think actually it was like in April of last 
year.
    Mr. Brown. So we really have a lot of people that have been 
hanging based on trying to get some decisions on that ruling.
    Mr. Dunlop. And in fact, in our budget presentation today, 
we also talked about how the Administration has requested $180 
million for our program and part of that funding would be to 
help us deal with the much more complicated decision making 
that has to be made as we try to find what the significant 
nexus is. That increase is a very substantial increase. If I 
remember correctly, I believe the number for the current fiscal 
year 2006 is about $154 million. From 154 to 180 is something 
that we were very earnest about achieving, so that we can keep 
this regulatory program moving apace.
    Mr. Brown. So you are not predicting getting this new 
budget passed in order to get this enacted, are you?
    Mr. Dunlop. No, no. Not at all. When the Court rules, we 
have no recourse but to follow the guidance of the Supreme 
Court. Regardless of what these costs are and other things, we 
just have to proceed on that basis.
    Now, if we don't have enough funds to actually do the work 
or if there isn't time to hire the people and get them on 
board, well, then, one of the consequences of these rulings is 
of course to cause the kinds of delays that you are describing. 
They are very real and very significant.
    Mr. Brown. Madam Chair, I apologize for going over my 
limit. But this is a major issue down in South Carolina, and I 
certainly appreciate your consideration as we try to move that 
as quickly as possible.
    Ms. Johnson of Texas. Thank you very much.
    Mr. Arcuri.
    Mr. Arcuri. Thank you, Madam Chairman.
    Thank you, gentlemen. I have a couple of questions that are 
related. First question is, General, can you tell me what 
percentage or what amount of your budget or the time that you 
spend, however you can break it down for us, is dedicated to 
projects in Iraq and Afghanistan as opposed to domestic 
projects?
    General Strock. Sir, that is a very difficult question to 
answer, because the Iraq program involves about $13.5 billion 
worth of effort. It is funded through a different 
appropriation, and it is over a period of years. To date we 
have placed about $7 billion worth of effort there. But in my 
opinion, it does not directly compete with our civil works 
program. As part of the overall effort to the global war on 
terror and the constraints that makes on the Federal budget, 
perhaps it could. But there is no direct connection or 
competition.
    We do rely on volunteers for the Corps of Engineers, mainly 
civilians, to move overseas and execute those programs. But I 
think we are able to compensate for the absence of those people 
within those districts and carry the workload of those who are 
absent. So I don't see a direct impact. In fact, I really would 
like to say and believe that we are better able to execute our 
domestic programs as a result of the intensity of the 
experience that our people receive over in Afghanistan and 
Iraq.
    Mr. Arcuri. Obviously the experience is always helpful and 
relevant. But are you saying that none of the programs or none 
of the money from the domestic budget is used for projects in 
Iraq or Afghanistan?
    General Strock. That is correct, sir.
    Mr. Arcuri. It comes from a different funding source?
    General Strock. Completely different appropriation,yes, 
sir.
    Mr. Arcuri. OK. My next question is, now, obviously you 
watch the news, you hear so much about natural disasters. In my 
own district, we are upland, we are in upstate New York and we 
still have some major flooding problems that we haven't seen in 
recent history. Has this affected the Army Corps of Engineers' 
ability to deal with the different crises, the more intense 
storms that we are receiving? Has it affected your ability to 
effect change, to quell these problems?
    General Strock. Well, sir, certainly storms like the 
intensity we experienced in Katrina taxed our ability to 
respond. We do not resource to the worst case. And that was 
very apparent in Katrina. We were at a low, I think, because we 
have standing processes and experience, to generate additional 
resources as we fed in response to that event. We are working 
very hard to align the response mechanisms we use. We respond 
to natural disasters, terrorist strikes and contingency 
operations. And we are trying to align all of those so we use 
consistent practices and processes when we do that.
    Mr. Arcuri. My question is this, and let me be a little 
more direct with it. You indicated earlier that you prioritize 
the projects that you address. Has the fact that we had 
seemingly increased numbers of flooding, an increased number of 
projects, raised the bar, so to speak, and therefore made the 
smaller projects, which affect communities like mine greatly, 
less likely to be addressed by the Army Corps of Engineers in 
the short term?
    General Strock. Sir, I think that could be an outcome. We 
are committed to doing more risk-based analyses. Certainly 
there are communities that face risks now, and risks are 
constantly changing, based on weather patterns, geomorphology 
and that sort of thing. So it is not a static system. There 
continue to be growing problems around the Country.
    We are unfortunately faced with the situation now that 
there is so much backlog on the books that our ability to take 
on new studies and new projects is diminished. And there is an 
increased awareness, obviously, and an interest in particularly 
flood damage reduction and protection. So there is more 
competition for a limited pool of resources. So it is unlikely 
under current processes and policies that we would budget for 
additional studies.
    Mr. Arcuri. Would the necessity to do this type of risk-
based analysis be diminished if you had more funding, if the 
funding was greater for the Army Corps of Engineers?
    General Strock. Certainly with more funding, we could do 
more detailed and rigorous analysis. I think we have an 
obligation to contribute to informed decision making, to do the 
analysis that really articulates and quantifies the risks 
people face, so that those in the Administration and Congress 
can make informed decisions about where to invest resources. 
Unfortunately, with the prohibition on new studies and new 
starts now, we are unable to do a lot in the specific sense of 
addressing local problems.
    Mr. Arcuri. But basically with additional funding, you 
would be able to address some of the flooding problems in the 
smaller communities that don't come up as such a high priority 
risk for the Army Corps of Engineers in its analysis?
    General Strock. Certainly, yes, sir, with more funding we 
could do more.
    Mr. Arcuri. Thank you so much. Thank you, Madam Chair.
    Ms. Johnson of Texas. Thank you.
    Mr. Shuster.
    Mr. Shuster. Thank you, Madam Chair.
    First of all, I want to thank the panel for being here 
today. I certainly appreciate all the good work that the Corps 
has done in my district over the years and I am sure will 
continue to do.
    My question, I think Mr. Brown, I am not quite sure if he 
hit on the same exact topic as I am going to ask about, the 
nationwide permits. The nationwide permits are expiring, I 
understand, the middle of March, March 18th. And that to date 
you have not reissued the regulations that need to be put out 
in the public for 60 days so the Corps districts and the States 
can do the various things they need to do to comply. If for 
instance, you were to put them out tomorrow, that would, the 60 
days would take us into April, there would be four weeks that 
people couldn't operate or there would be a gap in the current 
NWPs. That of course causes great problems for these 
contractors and developers around the Country, being able to 
plan long-term to keep the work going. Obviously time is money, 
and it is going to cost them.
    Does the Corps have a plan to enable the existing 
permittees to continue to operate under their current NWPs?
    Mr. Dunlop. Congressman, it is our belief that in fact we 
can manage around, that there really will not be a gap.
    Mr. Shuster. I am sorry, say that again?
    Mr. Dunlop. We don't believe there will be a gap. Now, 
theoretically there is because of the States, when they have 
the 60 days to review their 401s, that is, the State water 
quality certifications. We believe that we can work with the 
respective States, that they could go ahead and authorize in a 
programmatic way for the Corps of Engineers, the regulatory 
branch, to go ahead and execute the NWPs by giving us blanket 
401s. If the States were to determine otherwise that they will 
not give a 401 until we have our NWPs and they have had their 
60 days, then that would present a problem.
    But I think it is a problem only in theory. We believe in 
practice we can manage through that. The bottom line is, we 
intend to keep on schedule with the publication of the NWPs and 
that this is imminent and will be done in a timely way, and 
that we can manage through so that the gap will not exist in 
practice.
    Mr. Shuster. OK, so you will just extend, is that my 
understanding, you will extend the current NWP, is that what 
you would do? Because again, my understanding is under the law 
you have to have 60 days public notice and we are a month away 
from them to expire. So you wouldn't just extend what they 
currently have, or would you just issue them a new one and 
forego the 60 day public notice?
    General Strock. Sir, I believe that the condition is that 
these nationwide permits will take effect immediately upon 
publication, which is imminent. The challenge is the State 
water certifications and coastal zone consistency 
determinations. The State will have 60 days to reorient their 
processes.
    What a developer would have to do, I think, in the interim, 
is comply with the nationwide permit, but would have to apply 
for an individual permit to comply with the State requirements.
    Mr. Dunlop. If the State doesn't give us programmatic 401s.
    Mr. Shuster. And you think in practice that it is going to 
be a rather simple thing? Because my understanding is these 
have little impact to the environment, that is why they can 
move quickly?
    Mr. Dunlop. That is right. I think that is right. We are in 
the process--the regulatory branch is in the process--of 
communicating with the States and advising them of these 
circumstances and working through any problems in advance that 
any State might have.
    Mr.Shuster. So you don't feel there will be a gap, and you 
believe that when they expire on March 18th, you will have----
--
    Mr. Dunlop. The new nationwides will be in effect and they 
will be lawful and everything will be able to move forward. We 
still have the kind of constraints that Congressman Brown was 
addressing. But in terms of the capacity of the nationwides to 
give people the tools out of the regulatory toolbox they need, 
we don't see an impact, an adverse impact, to the regulating 
community.
    Mr. Shuster. All right. Thank you very much.
    Ms. Johnson of Texas. Mrs. Napolitano.
    Mrs. Napolitano. Thank you, Madam Chair.
    General, there are a couple of questions that have to do 
with my area. One of them is not necessarily my area, but the 
delta levees in northern California. As the chair of the 
Subcommittee on Water and Power, that is a great issue for the 
State of California. What is the Army Corp proposing to do to 
strengthen those levees? This is the bay delta up in northern 
California.
    General Strock. Yes, ma'am. We worked very closely with the 
State over the last year to identify the most critical areas. I 
think we are well on the way to making those repairs.
    The broader aspect, though, there is a tremendous amount of 
work, as Congresswoman Matsui indicated, throughout the entire 
delta that needs to be worked. We have plans in place and we 
are working toward that. But that is something we will have to 
work together.
    Mrs. Napolitano. I would like to sit with you at a later 
time, because it is an issue of the possible intrusion of the 
seawater into that area.
    General Strock. Certainly.
    Mrs. Napolitano. The second area that I wanted to ask is 
recently, the City of Los Angeles, the U.S. Army Corp of 
Engineers announced a $2 billion plan to transform 32 miles on 
the Los Angles River into a green ribbon of parks, pedestrian 
walkways, bike trails and housing. I will have a question on 
the housing, but that is later. The San Gabriel River is a 
great proposal that was started some years ago by Senator, one 
of the Senators.
    At any rate, why was not the San Gabriel River included in 
the proposal and can you include it in the proposal to study 
the San Gabriel River, which is not more than a few miles down 
on the other side?
    General Strock. Ma'am, I can't answer the question, either 
the proposal for the L.A. River or the San Gabriel. I will have 
to get back with you.
    Mrs. Napolitano. I would appreciate it. What is the Corps' 
goal, in 25 words or less?
    General Strock. Twenty-five words or less? Boy, you got me. 
I require my people to have those sorts of elevator speeches, 
and I am caught without one.
    [Laughter.]
    Mrs. Napolitano. I don't want a speech.
    [The information received follows:]

        The San Gabriel River was not included in the proposal for the 
        Los Angeles River because there was no local sponsor for that 
        action. The Los Angeles District is working with Los Angeles 
        County, and our understanding is that currently the County 
        intends to request a new reconnaissance study for the San 
        Gabriel River area. This study could be performed under the 
        existing Los Angeles County Drainage Area authority.

    General Strock. I think, as I indicated in my opening 
statement, we are looking for a mechanism to make sound 
decisions on investments in water resources for this Nation 
based on performance and returns on investment. We are looking 
for a water resources program and policy that contributes 
effectively to our national economy, to our environment and to 
national defense.
    Mrs. Napolitano. That is over 25, but I will take that.
    Then why is it that we continue to see cuts in the budget 
that are going to help our economy grow, whether it is the 
tourism by helping the beaches refurbish, by doing all those 
different things? And one of the questions that I did have is 
dovetailing into Mr. Arcuri's question about your budget. You 
indicated it was $13.5 billion into Iraq and $7 billion today, 
although that doesn't come out of your budget for this 
particular area. But what has been your increase in the last, 
say, four years since the war, or decrease for projects that 
are so necessary and vital to the national welfare and economy?
    General Strock. Ma'am, I think generally speaking, the 
President's budget has had a steady increase over the last few 
years of about $200 million a year. When you compare it to the 
appropriation, then you have a difference. But I think the 
President has consistently added more money to the civil works 
program. And this is the largest civil works budget that has 
ever been requested by any President.
    Mrs. Napolitano. Well, I am specifically addressing myself 
to the investigation and construction account. Investigation 
decimated by 54 percent. How else are we going to be able to 
help the communities? And then construction by 35 percent. Then 
we go to the Clean Water State Revolving Fund being cut. Those 
are areas that are key and vital to the recovery of our 
Country's economy. Yet we are saying, well, we can send more 
money to Iraq, but we can't put some of that money to work to 
be able to help us be able to fund the war later on, if we run 
into another one.
    General Strock. Yes, ma'am. Again, I don't see a direct 
plus and minus to the commitment we have made to Iraq. The fact 
is that we have many more projects on the books, as we have 
already talked about, we have a tremendous capability and 
requirement that is not being satisfied. So the 
Administration's general policy is, rather than bring new 
projects aboard, let's finish those high-performing projects we 
have now.
    I do share your concerns with the lack of investment in the 
investigations. Because in addition to providing information on 
future needs of the Nation, it allows us to maintain a 
competency to do the sorts of studies to contribute to informed 
decision making. But again, it is the position of the 
Administration that we must focus on what is on the books now, 
put those projects into operation, so we can begin to realize 
the benefits that they will provide.
    Mrs. Napolitano. Would it be possible------
    Ms. Johnson of Texas. Thank you very much. Your time has 
expired. We will have to come back.
    Mr. Miller.
    Mr. Miller of California. Welcome. I know when you walk in 
this room you are ready to make a presentation, you walk out 
feeling like a punching bag oftentimes. General Strock, I would 
like to welcome you here. I would like to say that for some 
reason in my district, we have a lot of issues that involve the 
Army Corps of Engineers. You have really been most 
professional, most responsive. Did you know Colonel 
Dornstauder? Well, he is somewhat presentable. But if he had a 
star on his shoulder, he would probably be a lot more 
presentable. But I have never seen anything to influence that 
decision.
    He is, and Colonel Thompson before him that I dealt with, 
have been really good to work with. We have had old munitions 
that we have found in cities that they have immediately 
responded to and dealt with, flood control issues that arise 
quite often. You always seem to be there. I know if you had all 
the money that you needed, you could make 435 of us very happy. 
But the funds aren't there and available to meet the demands 
placed upon you.
    But in my district, I represent the 42nd Congressional 
District in California, mostly Orange County, small part of 
L.A., small part of San Bernardino. We have the Santa Anna 
Mainstem project, which includes Prado Dam. The Army Corps 
estimated in the late 1980's that if that wasn't completed as 
proposed if they had a major flood, it would impact about 
110,000 acres, over 3 and a quarter million people. And the 
damage of that projection was $15 billion, who knows what it 
would be like today.
    We have been steadily working on that project. Now, last 
year the proposal from the Administration was about $54 million 
on that project. This year it has been cut down to about $17 
million. And that whole project has not only a major impact on 
flood control, but the people that live behind that project 
have property that we are trying to acquire as the dam is 
elevated have been waiting very patiently for years. Their 
property has basically been condemned because they can't build 
on it, they can't sell it for development, and it is in a flood 
controlled area. So until the dam is completed and acquired, 
they are kind of stuck.
    I just don't know if you have any idea how long this 
project is going to take. You have been working on it yearly. 
It is going up gradually. But we have been since the late 
1980's and 1990's trying to complete this project and it is 
still under construction. So do you have any kind of an idea 
what we are looking at?
    General Strock. Sir, I don't have the specifics on that in 
front of me. I will have to get back to you to lay that out for 
you in more detail.
    Mr. Miller of California. Further on that question, the 
Administration I know comes up with proposal on how much they 
are going to spend, and they prioritize projects. How much 
direct input does the Army Corps have in prioritizing the 
funding and prioritizing the project in their budgetary 
process?
    General Strock. Sir, we have a considerable amount of 
direct input. We are given guidance from the Administration on 
how to present that. We do help in the development of that 
guidance. But we apply the guidance that we think does steer 
the available funding in the right ways by looking at benefit 
cost ratios, by looking at turns on environmental projects and 
so forth. So I am satisfied that we do have the ability to 
shape the guidance and make the recommendations for funding 
that we need to make.
    Mr. Miller of California. Would Congress enacting a basic 
water resource development act and prioritizing these 
yourselves, would that be beneficial, would that be detrimental 
to your efforts?
    General Strock. Sir, it is my personal view that a Water 
Resources Development Act would be useful to us, because we 
haven't had one in the last six years. And that is the 
legislation we use that shapes policies that must change over 
time. I think we certainly benefit from it.
    Mr. Miller of California. Well, as I say, Colonel 
Dornstauder has done a really good job. I know he is leaving 
this year, I believe, and is going to be replaced by somebody 
else. Colonel Thompson before him was excellent. Is there any 
way that you can get us some kind of a projection that is 
realistic based on what your future prioritization are going to 
be as far as funding, as to when this project might come to 
fruition and completion and when we might expect, especially 
that are impacted behind it, on both sides of this dam, to have 
issues resolved? Can you do that for us?
    General Strock. Sir, I will certainly try to do that, yes.
    Mr. Miller of California. Thank you. I thank you for your 
testimony and once again, the Army Corps has been very good to 
my district and I appreciate it. I yield back.
    Ms. Johnson of Texas. Thank you very much.
    Mr. Hall.
    Mr. Hall. Thank you, Madam Chair. I will keep it short.
    I have two questions. The first one pertains to the 
capability for Delaware River comprehensive watershed flood 
management plan. There are three items listed in the proposed 
budget which were showing in my district and also Congressman 
Hinchey's and Congresswoman Gillibrand's district. The Delaware 
River comprehensive watershed flood management plan capability 
for fiscal year 2008 of $300,000, Upper Delaware River 
watershed the same.
    And planning assistance to States, Section 22, all of them 
were taken to zero this year in the proposed budget. And I am 
just curious how we can begin to address the backlog of 
projects like this. We heard about capability before, we know 
in our area that the need is there. It is not just that there 
is capability, but there is this need. We have had two floods 
that caused substantial damage in the last four years. The 
Delaware was one of them, Port Jervis and that whole area of 
the Delaware.
    So how are we supposed to respond to a zero budget line in 
2008 and address this and what thoughts do you have on a 
realistic number?
    General Strock. Sir, I don't have the specifics of those 
projects in front of me. But in general, if the assessment is 
that there is a high risk to safety there and we have various 
metrics to evaluate that, the number of people in the flood 
plain, the anticipated velocity and volumes and so forth, that 
we will take on those studies. But without looking at the 
specifics of that project, I can't give you a good answer on 
that. I will have to do that for the record.
    Mr. Hall. I would appreciate if your staff would respond to 
y office with that. Because I am getting this question all the 
time in Port Jervis, in particular.
    And the last question, I will edit out the other ten, and 
send them to you in writing, there is a piece here in the 
written statement about hydropower. I understand that the 
Philadelphia office has been involved in a low-head hydropower 
project in Pennsylvania, at least one. I was curious if the 
Corps would be willing to undertake a full evaluation of what 
resources and facilities under its jurisdiction may represent 
opportunities to expand low-head hydro. We have, according to 
the Idaho National Laboratory, in New York alone 4,000 some 
low-head hydro sites, existing dams and waterfalls where a 
turbine could be put into place to harvest, they claim, greater 
than 12,00 megawatts of power without having to build anything 
new other than the turbine. And many of those dams, I 
understand, are flagged for safety reasons by the Corps. So do 
you see the Corps undertaking that sort of study?
    General Strock. Sir, I will have to answer that one for the 
record as well. In general, we applaud the opportunity for 
multiple purposes, to use a water column for multiple purposes 
as it moves through the system. Again, I will have to give you 
a separate answer for that one.
    Mr. Hall. Thanks for your testimony. I will yield back my 
time.
    Ms. Johnson of Texas. Thank you very much.
    Let me ask a question of Mr. Dunlop. As you know, the 
Congress has not passed a water resources bill since year 2000. 
Of course, the whole country is pleading for something to 
happen. We must take some of that responsibility, but we also 
feel that we have not had the support of the Administration. 
Since year 2001, they have not even submitted a formal water 
resources bill to Congress, nor has the Administration been an 
active player in moving anything along.
    My question is, it is pretty simple, is this Administration 
going to submit a water resources proposal to Congress this 
year?
    Mr. Dunlop. Well, the decision about that has not been 
finally made. But I can tell you, Madam Chair, that we are very 
vigorously developing a legislative framework that we believe 
will reflect the kinds of priorities that we have discussed 
today and some of which the members have discussed today. Our 
proposal will first of all, of course, support the budget 
recommendations that would require legislative enactment. But 
in the coming weeks, I believe that we are going to be able to 
make a proposal that will help accomplish the kinds of 
principles and the practices and the policies that have proven 
successful in the past. And we will seek some creative 
incentives to be able to improve them for the future.
    So the bottom line, Madam Chair, is that we would like very 
much to work closely with this Committee and with the Congress 
toward a Water Resources Development Act that would allow you 
to fulfill your legislative objectives and responsibilities.
    Ms. Johnson of Texas. Thank you. Does that mean that the 
Administration is supporting the Congressional efforts this 
year?
    Mr. Dunlop. Well, when you say supporting the efforts, we 
always have supported the efforts. We have always been in the 
position where we want to be helpful to the Congress and 
provide what counsel we can.
    Ms. Johnson of Texas. I know that is the way it is with the 
Corps.
    Mr. Dunlop. And with the Administration, yes, ma'am. I am 
speaking on behalf of the Administration, not only the Corps of 
Engineers, but Assistant Secretary Woodley and the people to 
whom we are subordinate in the Executive Branch. We are under 
direction that whenever the Congress undertakes legislative 
activity, we are to be absolutely helpful, to be responsive in 
every way and to try to be creative in recommending specific 
things that we believe will carry out the best practices. And 
as I had indicated, it is very much our hope to be able to come 
forth with some specific recommendations and proposals and 
frameworks that will assist this process that you are engaged 
in with the WRDA bill that almost came to fruition last year.
    Ms. Johnson of Texas. Thank you very much.
    Mr. Boustany. Thank you, Madam Chair.
    First of all, General Strock, let me just say, thank you 
very much for your service to our Country. I know this is 
probably the last time you will appear before the Subcommittee. 
Thank you for what you have done for Louisiana. Let me just say 
I am glad to see that you don't have any more gray hair as a 
result of the challenges that we put before you in Louisiana.
    In the interest of time, I would ask that the Corps provide 
a summary of what has been done to date in New Orleans, the 
Gulf Coast area, in the aftermath of the storms. Furthermore, 
an assessment of what needs to be done as we go forward to 
provide for safety.
    Likewise, back in December of 2005, we had authorization 
and appropriation for a survey study of southwest Louisiana. I 
would like an update on that as well, if you could provide 
that. Not today, but some time in the future, to my office.
    One question, though. I mentioned in my testimony, 
Louisiana had released its latest version of a draft 
comprehensive master plan for a sustainable coast. I know it is 
still a work in progress. The Corps has been working with the 
State on the Congressionally-mandated Louisiana coastal 
protection and restoration. I am not sure how these two are 
going to be merged together. Could you give me some guidance as 
to what to expect there?
    General Strock. Sir, the LACPR, we are working on it very 
closely with the State of Louisiana in partnership with them. 
So we are considering their ideas and their master plan. We are 
also considering the previous work we did with the Louisiana 
coastal area study. So all of that is being rolled together 
into our recommendation for the coastal protection.
    Mr. Boustany. I appreciate that. Being the Congressman for 
the Seventh Congressional District in southwest Louisiana, I 
just want to emphasize that we don't leave southwest Louisiana 
out in that process.
    General Strock. Sir, very briefly, I can tell you that on 
the study you referred to, we will complete the recon shortly. 
We have evaluated three plans which we all think are 
economically justified. And we expect a letter of intent from a 
local sponsor soon. We should be prepared to move on the 
feasibility study.
    Mr. Boustany. So you expect that all that will be merged 
into a comprehensive report?
    General Strock. Yes, sir.
    Mr. Boustany. Thank you. That is all I have.
    Ms. Johnson of Texas. Thank you very much. I thank the 
witnesses for panel one, as we complete, and most especially 
look forward to working cooperatively as we have in the past. 
If the Subcommittee has any further questions, if they can be 
submitted, we will submit them for response. I appreciate your 
coming.
    We will now call on the second panel, who has been here 
very faithfully waiting for their time.
    Mr. Baird. [Presiding] In the interest of time, I will go 
ahead and introduce our panel as they find their way to their 
seats.
    Our second panel of witnesses consists of the Honorable 
Benjamin H. Grumbles, Assistant Administrator of the 
Environmental Protection Agency's Office of Water. It is good 
to see you again, Mr. Grumbles. The Honorable Susan Parker 
Bodine, Assistant Administrator for the Environmental 
Protection Agency's Office of Solid Waste and Emergency 
Response; Mr. Tom Kilgore, President and Chief Executive 
Officer of the TVA, Tennessee Valley Authority; and Mr. Arlen 
Lancaster, Chief of the U.S. Department of Agriculture's 
Natural Resource Conservation Service.
    Your full statements will be placed in the record and we 
ask that you try to limit your testimony to about five minutes 
as a courtesy to other witnesses. We will proceed in the order 
in which the witnesses are listed in the call of the hearing. 
Thank you all for being here.
    Administrator Grumbles, please proceed. Thank you.

  TESTIMONY OF THE HONORABLE BENJAMIN H. GRUMBLES, ASSISTANT 
ADMINISTRATOR FOR WATER, U.S. ENVIRONMENTAL PROTECTION AGENCY; 
THE HONORABLE SUSAN PARKER BODINE, ASSISTANT ADMINISTRATOR FOR 
    SOLID WASTE AND EMERGENCY RESPONSE, U.S. ENVIRONMENTAL 
   PROTECTION AGENCY; TOM KILGORE, CHIEF EXECUTIVE OFFICER, 
  TENNESSEE VALLEY AUTHORITY; CHIEF ARLEN LANCASTER, NATURAL 
  RESOURCES CONSERVATION SERVICE, UNITED STATES DEPARTMENT OF 
                          AGRICULTURE

    Mr. Grumbles. Thank you, Mr. Chairman. It is a delight to 
be here on behalf of EPA and the national water programs.
    The national water Programs in the President's budget 
amount of $2.7 billion, or 37 percent of the Environmental 
Protection Agency's budget. The budget advances our goals 
toward greater sustainability and increasing the effectiveness 
and efficiency of the Nation's water programs. Mr. Chairman, 
what I will do in the brief overview is to highlight the key 
themes and areas and priorities of the budget.
    Mr. Chairman, as you know our focus is on infrastructure 
and sustainability of infrastructure. It is the key to closing 
the gap and improving health and economics within the 
communities and the watersheds. The President's budget reflects 
the sustainability of our four pillars of sustainability 
program. We are seeking $688 million for the Clean Water SRF. 
We are also including in this budget, Mr. Chairman, an 
initiative of the Administration, the Environmental Protection 
Agency and the Department of Treasury have worked together on 
this. And within the President's budget is a proposed new water 
enterprise bond initiative. What this means, Mr. Chairman, is 
the potential to increase by billions of dollars the investment 
in the Nation's water and wastewater infrastructure.
    Specifically what the Administration is seeking is to amend 
the U.S. tax code to remove the unified State volume cap on 
private activity bonds for water and wastewater infrastructure. 
We believe that while this will cost $184 million over a ten 
year period, it will translate into billions of dollars of new 
investment in water and wastewater infrastructure and advance 
our objective of sustainable infrastructure throughout the 21st 
century.
    Another key component of our approach to water and 
wastewater infrastructure is to emphasize like never before 
water efficiency. EPA is putting a priority within our water 
programs on voluntary public-private efforts, modeled in part 
on the Energy Star program, but with a specific focus on water, 
water efficiency. So our budget will certainly help us continue 
this effort that was launched last June to develop a labeling 
program so that consumers and families and communities can 
choose water efficient products and appliances and save money 
and energy and also help advance ecosystem protection within a 
watershed.
    The other item I want to highlight, Mr. Chairman, is the 
importance of watersheds and watershed protection. The Agency 
is seeking $57 million for the Great Lakes. It is a priority of 
the President and the Administrator, and that includes $35 
million for the Great Lakes Legacy Act, to clean up 
contaminated sediments, to keep the ball moving forward and to 
make progress on the ecosystem health and protection to protect 
and restore the Great Lakes.
    The Chesapeake Bay includes in the EPA budget a continued 
increase in funding for the EPA from our perspective, and that 
is $29 million for the Chesapeake Bay. We are also including 
$39 million, a continued increase in the national wetlands 
programs that the EPA works in partnership with the Army Corps 
of Engineers on. That is not just the regulatory effort, it is 
also cooperative conservation, which is a principle of the 
President to advance the goal, the ambitious goal, the new goal 
for the Country that the President announced on Earth Day in 
2004, and that is not simply maintaining the wetlands base in 
America, but gaining, increasing wetlands. So our budget 
reflects that continued commitment.
    The other key item I want to highlight, Mr. Chairman, is 
water security. The goal of the U.S. EPA national water 
programs is to ensure that water is clean, safe and secure. 
Water security in this post-9/11 world is critically important. 
There is $44 million included in the budget specifically for 
water-related efforts, advancing the technology, providing the 
tools and training to water utilities, as well as wastewater 
utilities, to work to increase the security of our Nation's 
water and wastewater systems.
    Lastly, Mr. Chairman, I want to emphasize the importance of 
oceans and coasts throughout. The President has emphasized 
through his ocean action plan that more than ever before, it is 
critically important to invest in and to use the collaboration 
and efforts of various Federal agencies to protect our oceans. 
EPA is requesting $13 million for our Ocean Dumping Act and 
oceans and coastal protection programs, and that is part of the 
overall effort of the President for a new initiative, $140 
million, to advance ocean protection and health.
    Mr. Chairman, I will be happy to respond and answer 
questions that you and your colleagues may have. Thank you for 
the opportunity to testify.
    Ms. Baird. Thank you, Mr. Grumbles.
    Ms. Bodine.
    Ms. Bodine. Thank you, Mr. Chairman, members of the 
Subcommittee. I am Susan Parker Bodine, the Assistant 
Administrator for the Office of Solid Waste and Emergency 
Response. It is always a pleasure to be back in this committee 
room, thank you.
    I am here today to discuss the President's fiscal year 2008 
budget request for Superfund, Brownfields and other programs in 
my office that fall in the jurisdiction of this Subcommittee. 
The President's fiscal year 2008 budget request provides the 
necessary funds for EPA to carry out our mission efficiently 
and effectively, to protect human health and safeguard the 
environment. The budget request continues to emphasize funding 
for homeland security, and my office's piece of that is 
preparedness, response and recovery. That is $45.2 million.
    We maintain funding for the Brownfields program at $162.2 
million and continue needed funding for the Superfund program 
at $1.245 billion to continue our success in cleaning up 
hazardous waste sites.
    Now, I know that in today's tight budget climate, EPA faces 
many challenges. In our program, particularly in the Superfund 
program, we are preparing to address large, complex sites. For 
example, the sites that have not yet had all their remedies 
constructed are averaging 4.3 cleanup projects 4.3 operable 
units per site. The ones where we have been successful in 
already completing construction, those averaged 1.8 separate 
cleanup projects per site.
    But I want to assure you that we are taking on this 
challenge and managing it. For example, through aggressive 
management of our contracts, we have been able to de-obligate 
more than $665 million since 2001. That is money that was 
sitting in contracts, had been obligated to contracts and the 
sites were completed, and we had excess money left over when 
the project was done. We were able to de-obligate that money 
and then use it, and put it to good use cleaning up other 
sites.
    In addition, since 2001, through our aggressive enforcement 
efforts, we have been able to put more than $1 billion into 
special accounts. This is PRP money that we collect from the 
responsible parties, put into special accounts and then we can 
draw down on that funding again to clean up sites. As of the 
end of fiscal year 2006, remedy construction had been completed 
at over 1,000 sites, at 1,006 sites.
    Now, while construction completion is one way to measure 
success in the Superfund program, it is an interim measure. It 
says remedy construction is done. But it isn't a measure of 
long-term protection. And so in 2007, we have established a new 
measure, which is post-construction completion, to make sure 
that the sites are ready for their anticipated uses. That means 
that the cleanup levels on the site have been met, that are 
consistent with the future anticipated use, and most 
importantly, that all the institutional controls are in place 
so that if the site use is restricted, then that will continue 
to be restricted on into the future, ensuring long-term 
protection. We anticipate in 2007 and also in 2008 to make 30 
sites ready for their anticipated uses.
    As the Subcommittee is aware, we have adjusted our goal for 
fiscal year 2007 for the number of sites where all remedies are 
constructed. It had been 40, we have adjusted that to 24. And 
the 2008 goal is 30 sites. However, we have not adjusted the 
goal that was in our strategic plan that was published in 
September. That strategic plan was a 2006 to 2011 strategic 
plan. The strategic plan was to complete $205 sites over that 
six year period. After analyzing the sites, we expect to 
continue to meet that goal.
    In doing this analysis, we have looked at the stage that 
the sites are at in remedy construction. These are long-term 
construction projects, and we are looking at where they are in 
that phase. That is the basis for establishing these numbers. 
As we look at it, we are seeing a dip in 2007, and then we are 
going to see it go up again, based on where they are in 
construction. So whoever is sitting in this chair in 2009 is 
going to be able to tell the Committee, construction 
completions are going back up. But that is because of where 
they are right now. That is because they are long-term 
projects.
    The budget request continues to support, of course, our 
emergency removal program that addresses spills and other 
incidents that have immediate risks at sites. We address 
immediate risks immediately with emergency removals and time 
critical removals. In our homeland security budget we are 
requesting an additional $6 million to help us set up 
laboratory networks that will allow us to address chemical 
warfare agents. That is new for us. We are very good at 
analyzing chemicals, ordinary chemicals. Chemical warfare 
agents is a capability we don't have yet and we are working on 
developing. We have $6 million in our request to help us 
develop that capability.
    As I mentioned, while maintaining our budget levels for 
brownfields, we have made adjustments within that. Our 
headquarters EPM account, environmental program management 
account, we have been able to do some belt tightening of our 
own money and reduce that. Within the STAG account, the State 
and Tribal Assistance Grants account, that account is steady. 
But again, within that account, we have been able to shift how 
we are spending the money, so that we are going to be able to 
give more grants to State and local governments for site 
assessment and cleanup and revolving funds.
    Mr. Baird. I am going to ask you if you can bring it to a 
close.
    Ms. Bodine. Thank you. I would be happy to answer any 
questions.
    Mr. Baird. Thank you very much. I appreciate your comments.
    Mr. Kilgore.
    Mr. Kilgore. Mr. Chairman and members of the Committee, 
thank you for letting us come. I am honored to appear today 
before your Committee to discuss TVA's programs and priorities 
for the future. And I am also appreciative of Congressman 
Duncan's earlier remarks. He represents the district that 
houses TVA's headquarters.
    This is my first appearance before you under the new 
governance structure established by Congress last year that has 
brought an expanded board and a fresh approach to TVA. With 
their fresh and strong business backgrounds, Chairman Bill 
Sampson and his fellow board members are using their wealth of 
experience to guide TVA's wide ranging business 
responsibilities.
    TVA's responsibilities boil down to just three things: 
energy, the environment and economic development. These are the 
core of TVA's mission for improving the quality of life in the 
Tennessee Valley region. They were in 1933 and they still are 
today. Two thousand six was a recording setting year in the TVA 
energy business. With respect to energy, the TVA power system 
met eight new monthly records for peak demand in 2006, 
including the largest peak demand in our history. Our 
reliability was 99.999 percent for the seventh year in a row.
    With respect to the environment, despite low rainfall in 
much of 2006, TVA's integrated management of the Tennessee 
River system continues to provide multiple public benefits. TVA 
also continued its $5.8 billion clean air program that has 
reduced sulfur oxide emissions by 80 percent since 1977 and 
reduced nitrous oxides emission during the ozone season by 81 
percent since 1995. The air in the Tennessee Valley region is 
cleaner now than it has been in many years. Later this spring, 
TVA's Browns Ferry Unit 1 in north Alabama will become the 
first U.S. nuclear unit to be brought online in the 21st 
century. Its safe, clean, zero-emission power will be a vital 
contributor to TVA's clean air strategy.
    With respect to economic development, TVA invested about 
$40 million to support the expansion of businesses and 
industries in the Valley in 2006. These investments have to 
track or keep some 53,000 jobs in the region and leveraged 
capital investment from other sources. It is not surprising 
that TVA was ranked number one among Utilities and Business 
Facilities magazine's report card on economic development in 
2006.
    As you know, TVA is financially self-supporting and no 
longer receives any Federal appropriations. TVA pays its own 
way using power revenues to buy fuel, pay our wages, service 
our debt, maintain our assets and fund our river stewardship 
program. Despite a challenging year for TVA operationally due 
to the low rainfall and a hot summer, TVA met its debt 
reduction target in 2006, reducing its existing total financing 
obligations by $341 million. This year, we expect to pay $529 
million in our TFO reductions. Total financing obligations, or 
TFOs, as we refer to them, include existing statutory debt and 
alternative financing mechanisms, such as lease leasebacks and 
prepayment agreements. In the past decade, TVA has reduced 
total financing obligations by nearly $2.5 billion and reduced 
the amount of each revenue dollar used to pay interest and 
other financing expenses from 34 cents of every dollar to 14 
cents of every dollar. That is a record we are proud of.
    Anticipating further growth in energy demand, TVA is 
exploring the cleanest, most cost-effective energy options for 
the future. These options will be addressed in the new 
strategic plan that is being developed at the TVA board's 
request. As we look forward to the future, TVA is committed to 
improving its financial health, maintaining fiscal 
responsibility and staying true to the mission for improving 
the quality of life for the people we serve. We look forward to 
continuing our close partnership with this Committee, the 
entire Congress and the Administration and with all our 
stakeholders, to ensure that we accomplish these goals.
    Thank you for the opportunity to appear, and I look forward 
to answering any questions.
    Mr. Baird. Thank you, Mr. Kilgore.
    Mr. Lancaster.
    Mr. Lancaster. Mr. Chairman, members of the Subcommittee, 
thank you for the opportunity to appear here before you to 
discuss the water resource program activities of the Natural 
Resources Conservation Service. I have submitted my full 
testimony for the record, and in the interest of the 
Committee's time, I will summarize our budget request for 
fiscal year 2008 for the watershed and flood prevention 
operations, watershed surveys and planning, emergency watershed 
program and watershed rehabilitation.
    Our water resource programs offer communities and 
landowners site-specific technical expertise and financial 
assistance for watershed project planning and implementation. 
The programs are designed to help solve local natural resource 
problems, including flood damage mitigation, water quality and 
quantity, soil erosion control and fish and wildlife habitat 
improvement. The water resources programs have given NRCS the 
authority to complete work on 2,000 watershed projects 
nationwide.
    The watershed and flood preventions program authorizes NRCS 
to work cooperatively with States and their political 
subdivisions to plan and install watershed improvement measures 
that foster conservation and utilization of the land and 
authorized watersheds. The President's budget for fiscal year 
2008 eliminates funding for this heavily earmarked program, in 
order to redirect them to higher priority programs that reflect 
national interests.
    While the NRCS water resource programs have been successful 
over the past 50 years, we believe that sponsoring 
organizations, along with State and local governments, will 
assume a more active leadership role in identifying solutions 
to local water resource concerns.
    Our watershed surveys and planning program. Under this 
effort, NRCS assesses natural resource concerns and develops 
coordinated watershed plans that conserve natural resources. 
This includes flood plain management studies, cooperative river 
basin studies, flood insurance studies, watershed inventory and 
analysis, as well as Public Law 83-566 watershed plans.
    With the elimination of the watershed and flood prevention 
operations program, funding is not necessary for the planning 
component. Therefore, the President's fiscal year 2008 budget 
eliminates funds for this program and redirects them to higher 
priorities.
    The third program is the emergency watershed protection 
program which authorizes emergency measures to decrease runoff 
and soil erosion, to safeguard lives and property from natural 
disasters. This includes the purchasing of flood plain 
easements.
    Typically work under this program ranges from removing 
debris from clogged streams caused by flooding, receding native 
grasses to prevent soil erosion on hillsides after a fire, or 
replanting and reshaping stream banks after a natural disaster. 
In response to requests from communities across the Gulf Coast 
region recovering from the 2004 and 2005 hurricane season, NRCS 
committed $350.9 million and obligated nearly $200 million in 
recovery work. Since funding for this program is provided 
through supplemental appropriations, the budget does not 
contain a specified request for AWP.
    Our watershed rehabilitation program. In November 2000, the 
Watershed Rehabilitation Amendments of 2000 authorized the NRCS 
to assist communities to address public health and safety 
concerns and environmental impacts of aging dams. Since the 
enactment of the amendments and the subsequent amendments in 
the 2002 Farm Bill, NRCS has developed rehabilitation plans for 
113 dams. The President's fiscal year 2008 budget requests $5.8 
million for watershed rehabilitation activities involving aging 
dams. We will use that funding to focus on critical dams where 
failure could pose a high risk for loss of life and property. 
This reflects the Administration's position that maintenance, 
repair and operations of these dams continues to be carried out 
locally.
    For the past 50 years, the Department of Agriculture has 
invested in local communities by providing funding and 
technical assistance through water resources programs. The 
benefits from these programs primarily accrue to local 
communities and we recommend that they continue to take on 
increasing responsibility of funding such projects.
    I thank the Subcommittee and would be happy to respond to 
any questions.
    Mr. Baird. I thank you, Mr. Lancaster, and thank all the 
witnesses for their patience and promptness.
    The Ranking Member and I have agreed to invite Mr. Shuler 
to ask questions first, followed by Mr. Boozman.
    Mr. Shuler. Thank you, Mr. Chairman. I want to thank the 
panel for taking time out of their day to present in front of 
the Committee. We certainly appreciate that, under the weather 
circumstances. I also want to congratulate Mr. Kilgore for his 
position and certainly the fiscal responsibility that the TVA 
is undertaking with some of their target debt reduction. I 
think it is $3.4 billion by year 2012. I want to commend you 
for that.
    First, how do we meet those targets in debt reduction? 
Secondly, in meeting those debt reductions how will you ensure 
that we still have the promise to keep air quality control and 
to increase air quality control in western North Carolina, East 
Tennessee and especially the Great Smoky Mountain National 
Park?
    Mr. Kilgore. Well, obviously what we have to do is from our 
free cash flow, which is basically produced from depreciation 
in our net income, is fund our capital expenditures and our 
debt reduction. Those are the two things it goes to. So we feel 
like we are on a good program to continue debt reduction at the 
rate we are at, and are looking forward to the capital 
expenditures which include additional clean air. We have spent 
about $4.5 billion so far, we have another $1.2 billion to go 
in the existing program.
    We announced today back in Tennessee that we will be adding 
the next scrubber. That doesn't mean it is the last one, it 
just means it is the next one, we have seven in operation, we 
are constructing eight, nine and ten. And we announced today 
the eleventh one. So we are progressing right up the line.
    We recognize that we have a lot of work to look at there, 
and we will continue and give you our commitment that we will 
continue to clean up there.
    Mr. Shuler. Thank you. Also alternative energy sources, 
sustainable renewable sources, excluding nuclear--how are you 
relating to and marketing to the public to incentivize them to 
lessen their dependence upon the grid.
    Mr. Kilgore. I think there are three things. Number one, we 
have some wind power, the first wind power farm in the 
southeast, in northeast Tennessee. That provides us some green 
energy. We also use sewer gas in the city of Memphis, for 
instance. We actually burn the gas that comes off of the 
processing of the sewage there in our Allen plant. Then as we 
go forward, we have to work even harder to get everybody to 
conserve and use energy at different times than on the peak. So 
those threefold things, conservation and then using the 
renewable energy sources are what we have to do.
    Then I will just say finally, we are upgrading our hydro 
system. We have actually increased the output of our hydro, 
which also is non-polluting, of all kinds. So we have upgraded 
that by about 10 percent trough to the last few years. We have 
a little bit left to go on that.
    Mr. Shuler. Thank you. I yield back.
    Mr. Baird. Mr. Boozman.
    Mr. Boozman. Thank you, Mr. Chairman.
    It is good to have you all here, we really do appreciate 
your hard work. We will have to visit with you, Ms. Bodine, in 
the sense of in your previous capacity last year, slipping us 
tough questions to ask as opposed to sitting over there taking 
tough questions. So hopefully it won't be too tough. But we 
really do appreciate all that you all do.
    One of the things that is really important to me is that, 
my rural communities in my district and I think across the 
Country are really concerned about the funding for the rural 
water and wastewater technical assistance. I think there is 
some concern that in the continuing resolution that that 
funding won't be available. Could you comment about that? I 
think that is something that is vitally important in helping 
those communities to address these problems before they go on 
and get out of hand.
    Mr. Grumbles. Congressman, I would be delighted to address 
that question. The challenge is to meet the Nation's water and 
wastewater infrastructure needs and also to advance watershed 
protection, and to do so in rural America as well as in urban 
and suburban America. You are asking a question about the 
funding for some drinking water programs and watershed 
protection efforts. The Agency works very closely with the 
National Rural Water Association and its State chapters. There 
is also the policy of the Administration not to carry forward 
earmarks, Congressional adds such as that. So that question 
about how the funding will occur for fiscal year 2007 is still 
undecided, it is not answered yet.
    I can also tell you, though, that the Agency is committed 
to working with that organization and with other organizations 
across the Country to provide funding to drinking water, to the 
drinking water SRF, through other programs that we have, to 
make sure that money and technical assistance get to the 
circuit riders and the rural water experts.
    Mr. Boozman. Thank you very much. And again, the funding 
for particular projects is one thing. The other thing, like I 
said, the technical assistance is so important to the rural 
water associations. I hope you will really look at it.
    Mr. Grumbles. Yes, sir.
    Mr. Boozman. That has been something that really has proved 
to be very, very valuable. We take for granted that America has 
water and yet there are so many areas in this part of the 
Country, so many areas in Arkansas, where because of wells 
going back and this and that, throughout the United States, as 
you know, we have many, many areas that are hauling water and 
things like that.
    So again, if you would look at that, we would be very 
grateful.
    Mr. Grumbles. We would be happy to. The grassroots efforts, 
the work of the rural water associations complements very much 
the overall national efforts and programs of the Agency. So we 
want to work with them and continue to work with Congress and 
discuss funding for these organizations. Because it is not just 
about drinking water and watershed protection. They also play a 
helpful role in advancing water security for small systems.
    Mr. Boozman. Good. Thank you very much. And again, thank 
you for your hard work. You have always been very, very helpful 
as we have had questions. It is very much appreciated.
    Thank you, Mr. Chairman.
    Mr. Baird. Thank you, Mr. Boozman.
    Mr. Grumbles, I will ask you a few questions, then after I 
am done, Mr. Boustany, followed by Mrs. Napolitano.
    Mr. Grumbles, I am pleased to see funding provided for the 
Chesapeake Bay and for the Great Lakes. I represent the Puget 
Sound area as well as the Columbia River. Can you talk to us a 
little bit about EPA's role in the Puget Sound area and 
anticipated efforts there? As you know, there has been a major 
statewide initiative to try to improve the health of the Puget 
Sound and habitat for salmon, et cetera. I would welcome your 
comments on that.
    Mr. Grumbles. Thank you, Mr. Chairman, I would be delighted 
to. In the President's budget request for EPA, there is funding 
specifically for advancing the Puget Sound Partnership. The 
Agency values the role it can play and has played over the 
years through the National Estuary Program.
    But also, we are very existed about working with the 
partnership to advance their efforts. I was just on the phone 
this morning talking with Interior officials, working with them 
to coordinate efforts. We think that the key with any 
successful regional collaboration is to ensure that it is on 
everyone's agenda, that partnerships are developed and that 
people recognize, it is everyone's responsibility. The Federal 
agencies are very interested in that. EPA in particular, in 
addition to some technical and funding assistance, we believe 
that more action will occur to address septic tanks and 
stormwater and habitat protection for salmon, some of the key 
issues that have been identified. We are very optimistic and 
excited about making progress in the Puget Sound.
    Mr. Baird. I appreciate that. Thank you.
    Ms. Bodine, at some point perhaps this Committee may get 
back to you on some of these issues about the numbers of sites 
that have been cleaned up there, some technical questions. We 
want to ask and understand what exactly that means, but I 
appreciate your testimony. I think the questions I would ask 
you are more detailed than we could cover in five minutes. So I 
will just give you a heads-up, we will invite you back.
    Mr. Lancaster, I am troubled by what seems to be a virtual 
abandonment of the mission of NRCS. The reason is, back home, I 
have talked to people who are very respectful of the work that 
has been done by your agency, and it seems that in a number of 
ways, you are cutting back or eliminating entirely programs. 
When you say you shift the costs, you expect the local 
communities to bear the burden. Any sense of what the net cost 
increase will be to our local communities? How much of the cost 
in dollars are we shifting to our local communities? Where do 
you suppose they will get that money?
    Mr. Lancaster. Thank you, Mr. Chairman. Under our programs, 
the local sponsors actually incur all the costs for operating 
and maintaining those facilities after they are constructed. 
And in terms of the construction of the programs, many of those 
practices, when we look at a watershed, structures are a part 
of it. But land treatment is a key part of addressing those 
watershed needs. Those are programs that address I think in 
other programs within NRCS, through our cost share programs as 
well as through our technical assistance. I can't give you a 
specific number on what the cost is on constructing additional 
facilities.
    But again, we are talking about a program here that is 100 
percent earmarking, and in terms of trying to address national 
priorities, there is not all that flexibility there so we can 
make sure those funds are focused on those national priorities. 
Again, we continue to work with landowners in the State of 
Washington, we have tremendous support and participation on our 
Farm Bill programs. Each of those practices do address land 
treatment as well as, in many cases, smaller structures.
    Mr. Baird. Within that, though, what will be the impact of 
the President's proposed budget on the programs you just 
described?
    Mr. Lancaster. The watershed fund prevention operations is 
the program that we would provide some assistance in 
constructing the facilities. Under the watershed program, 
watershed survey and planning program, we go out there and we 
make determinations on what needs to be done. We are currently 
doing that under our rapid watershed assessment, so we can 
better target our other programs. So that work is occurring.
    Without the watershed flood prevention operations program, 
there is no need for that additional survey program. So I think 
really we are talking about watershed flood and preventions 
operations program. And again, Mr. Chairman, I believe that few 
of our other programs can more effectively address land 
treatment and other needs in those communities. We are always 
available to provide technical assistance to landowners or 
sponsors as they are looking to address the water quality, 
water quantity, flood mitigation efforts.
    Mr. Baird. I appreciate that. I want to just for the record 
say that it occasionally happens that an Administration will 
just zero out programs and say that well, we just expect the 
local folks to take up a greater burden in this, which is 
really shifting the tax burden to the local communities.
    Before I conclude, again, Mr. Grumbles, I appreciate EPA's 
efforts on the Puget Sound and I want to continue to work with 
you on that. The partnership is very exciting in a critical and 
beautiful part of this Country.
    Mr. Boustany?
    Mr. Boustany. Thank you, Mr. Chairman.
    Let me follow up on Mr. Baird's question, Mr. Lancaster. 
What is the current backlog of authorized small watershed 
projects?
    Mr. Lancaster. Based on the work we do with the watershed 
survey and planning, I think there is $1.4 billion in a backlog 
for structural practices. Many of those, again, you can address 
through land treatments or other practices. And many of those, 
I think, there is still determination on whether or not those 
are high priority projects. With limited funding within our 
discretionary budget, we are going to target it towards 
technical assistance for our programs, as well as our Farm Bill 
implementation, where we are directly helping landowners reach 
their resource concerns and address those concerns.
    Mr. Boustany. Thank you.
    Mr. Grumbles, EPA's gap analysis assumes that 
municipalities will borrow at lower than market rates, is that 
correct?
    Mr. Grumbles. That is correct.
    Mr. Boustany. So can you give an indication if they have to 
borrow at market rates, what effect that is going to have on 
the overall figure?
    Mr. Grumbles. I think that the key to answering that 
question and to putting together all the different pieces in 
the puzzle to narrowing the gap, which is what we are also 
committed to, is doing a couple of things. One is working with 
utilities and communities to provide tools to help them set 
their own rates, but rates that reflect the full value of the 
service that is provided.
    So we think that that will help in terms of setting rates 
to help provide the capital and the long-term O&M funding for 
narrowing the gap, which we estimate at, if you assume that the 
rates will increase, or revenues will increase, not only at 
normal inflation rates, but 3 percent increase, we believe the 
gap is about $45 billion over the next 20 years. Actually, that 
is the Drinking Water SRF. The Clean Water gap is about $21 
billion over the next 20 years.
    We think the key is both working with communities to set 
rates to have asset management plans, to set rates that reflect 
the full value of the service provided, and also to bring 
innovative tools, new tools to the table, such as these water 
enterprise bonds, so that there will be public-private 
partnerships if the community wants to go that route. But we 
think that is the key to sustainability and to help narrow that 
water infrastructure gap.
    Mr. Boustany. Thanks. I appreciate your answer. I am also 
pleased, in your testimony, about your comments on private 
activity bonds, lifting the cap. I think we are going to have 
to look at ways, as we go into the future, ways to look at 
alternative financing mechanisms. I know in our recent markup, 
we have some provisions for the GAO to study that and give a 
report back to the Committee. I appreciate it. Thank you.
    Ms. Bodine, what are the sources of funding for the 
Superfund program beyond annual appropriations?
    Ms. Bodine. We also have funding from PRP funding that is 
put into special accounts. We reach settlements with 
responsible parties, collect their money and put it in a 
special account, and we can draw down from that. At sites that 
are fund-lead, we have State cost share. There is a 10 percent 
State cost share. That is money that we can use. And as I 
mentioned in my testimony, we also are using de-obligations 
where, in the past we have put too much money into contracts, 
the project is done, there is money just sitting there idle, 
left over, and we have been able to use that money as well. We 
have a variety of sources.
    Mr. Boustany. It is my understanding that even though the 
appropriation level has gone down somewhat annually for the 
program, that the overall figures remain fairly constant?
    Ms. Bodine. It is relatively steady. I think I supplied 
staff with data on that. But yes, it has maintained relatively 
stead.
    Mr. Boustany. Thank you. That is all I have.
    Mr. Baird. Mrs. Napolitano.
    Mrs. Napolitano. Thank you, Mr. Chair.
    Just to the EPA, I have worked for years with one of the 
best representatives you have on the West Coast, your regional 
director, Wayne Nastry. My compliments to you for having him 
there.
    Some of the issues that I have are concerning the 
brownfields, because we have beaucoup in California, as you 
well know. Why are you asking for less funds? I am sure we 
don't have less. There are going to be more, because you 
haven't even scratched the surface in some of the areas, and I 
can tell you, sitting on the Water Subcommittee, they will be 
there. Could you answer that, either one of you?
    Ms. Bodine. The Brownfields program has steady funding. It 
does not have less funding. We have actually been able to 
increase, within that account, the amount of money that we are 
providing to local governments and to States for the cleanup 
grants, for the assessment grants. We have been able to do that 
by shifting some funding away from some headquarters contracts 
and away from some of our interagency agreements, so we could 
actually increase------
    Mrs. Napolitano. I am sorry. That is double talk.
    What I am asking is, there is $110.7 million, or 55 percent 
less than the authorized amount, the lowest Presidential 
request for brownfield cleanup funding since the program was 
created in 2002.
    Ms. Bodine. The request is consistent with the amount of 
Congressional funding that has been made available. The 
authorization was in 2002. For the first several years of the 
program, we had asked for $110 million out of the STAG account 
to help pay for these grants, and consistently got $89 million, 
$90 million. After going out, making a request at the high 
levels and being rejected, we several years ago lowered our 
request to be consistent with what Congress was willing to 
provide. Since then, the requests have all been steady and the 
funding has been steady.
    Mrs. Napolitano. I won't go into my personal experiences, 
but I ask for more to get what I need.
    The projected public health implications of the year's 
decrease in the SRF funding, what documentation or analysis 
have you or the Office of Water done to determine the public 
health effects?
    Mr. Grumbles. Congresswoman, we think that one of the 
greatest success stories under the Clean Water Act is the Clean 
Water State Revolving Fund. That is why we are committed to 
continuing to provide through 2011 a total of $6.8 billion 
between, this President committed between 2004 and 2011 to 
provide $6.8 billion, plus bringing innovative tools and a 
focus on sustainability to the table, so that this Clean Water 
SRF will have a revolving rate of $3.4 billion a year, well 
into the future. We think investing in clean water 
infrastructure at all levels of government, and pursuing full 
value pricing, so that the ratepayers are providing the funds 
to reflect the true value of the services that the 
infrastructure systems provide, will provide enormous 
environmental and public health benefits. That is why we are 
committed to continuing to invest in the Clean Water SRFs and 
to build greater sustainability.
    Mrs. Napolitano. OK, you can play with the figures all you 
want, but it is still less than what we require. Or at least, 
studies have not been shown why this is such a major budgetary 
decision.
    I will go into the next one, because my time is running 
low. The question into the U.S. Mexico border program, I am 
very concerned, because I work on the Colorado River issue as 
well as the Rio Grande issue in my committee. And I am 
concerned, you have a $300 million funding for border water 
infrastructure and remaining unspent. Is this typical EPA 
funding? There is hundreds of millions of dollars remaining 
untouched while untreated sewage and wastewater, industrial 
wastewater, comes from Mexico into the U.S. What are you doing 
about it and why are we not using that money to be able to 
address that?
    Mr. Grumbles. Congresswoman, we are committed to continuing 
to deliver environmental results while meeting a balanced 
budget. When it comes to the many needs along the Mexican 
border, whether it is wastewater needs or drinking water needs, 
we are focused on several items. One, through the border 
environment infrastructure fund, that is a key program. Now, 
with respect to that program, what we are focused on in the 
President's 2008 budget is on accelerating the delivery of 
projects that are already in the pipeline.
    With respect to some of the coastal issues, we think that 
the key is not only infrastructure investment, but to increase 
the science of coastal water quality monitoring, to provide 
additional funding------
    Mrs. Napolitano. You are not answering my question, sir. I 
am concerned about the border and the effect it has on the 
people on the United States side that have to put up with this.
    Mr. Grumbles. I would say that it is also a priority for 
the U.S. EPA to work with our partners on both sides of the 
border.
    Mrs. Napolitano. Thank you. I would like later, I will 
submit some questions and I would like to talk to you later. 
Thank you.
    Mr. Baird. Mr. Hall.
    Mr. Hall. Thank you, Mr. Chairman.
    Thank you all for being here. I am sure we all feel that 
your work is among the most important that Government does, and 
indeed, is part of national security, water security, that 
being. And I wanted to start by asking Mr. Grumbles about the 
State Revolving Loan Fund. This week I was proud to join my 
colleagues on the Committee to report out reauthorization of 
the Clean Water State Revolving Loan Fund. The need is clear, 
in New York alone EPA identified $20 billion in need. And I am 
stunned that with such a clearly defined need, EPA has once 
again shorted the funding for clean water. The reduction in the 
proposed budget from the CR passed by the House is almost $400 
million, a $44 million cut for New York.
    This budget says to our States and our communities that 
they either have to go into their own pockets, which they most 
likely can't do, or be forced to tolerate unclean water. What 
is the justification for this?
    Mr. Grumbles. Congressman, the justification is that we are 
committed to delivering environmental results, while meeting a 
balanced budget, and that the President's plan for the Clean 
Water SRF is to provide over that period of time, between 2004 
and 20011, a continued commitment. I certainly recognize that 
there are other constituencies or other groups, there are 
members of this Committee who are urging a greater level of 
funding from the Federal Government for the State Revolving 
Funds. Our approach is that this is a key opportunity, a time 
to advance a new wave of innovative financing and 
infrastructure assistance, to continue to provide funding for 
the SRF, but to increase the leveraging potential of that State 
Revolving Fund mechanism, to get Congress to pass a water 
enterprise bond, which will bring in, we hope, billions of 
dollars in additional funding, private activity for public 
service bonds.
    But we are not content with the status quo. We are focused 
on developing new tools and working with our State and local 
and private sector partners to narrow that gap. But it is 
certainly not going to be narrowed solely based on the 
revolving loan funds and the Federal grants for purposes of 
those funds. We appreciate the work of Congress to reduce the 
number of earmarks. I can tell you as a national water program 
manager that there are over 800 backlogged, earmarked projects 
that haven't gone through the system yet. We go through the 
NEPA analysis and other review. It is another example of, we 
think, working with Congress. The key to truly narrowing that 
gap for infrastructure is a combination of the State revolving 
funds, their long-term sustainability, increased leveraging and 
also new tools, bringing in the private sector for public works 
projects.
    Mr. Hall. Thank you. I always get a little bit nervous when 
I hear about yet another area of Government responsibility that 
we thought was sort of essentially important public protection 
being farmed out to private investment. But I will move on to 
the Superfund sites, like the Hopewell Precision contamination 
area in my district, which has TCE leaked into the local water 
supplies. What impact will the reductions have on the National 
Priority Sites like Hopewell Precision? This is to Ms. Bodine. 
EPA has been dragging its feet on updating its human health 
standard for TCE. Does this budget include funding to update 
that standard and to undertake the remediation necessary to 
meet a new standard? And if not, why?
    Mr. Bodine. First of all, certainly we are very actively 
working on the Hopewell Precision site in your district, in 
addressing the vapor intrusion issues that you are talking 
about. With respect to the TCE standard, the Office of Research 
and Development is working on that issue. But while they are 
working on that, that doesn't stop the Superfund program from 
proceeding with cleanups. Even though we don't have a specific 
number for the vapor pathway, if the contamination is in water, 
we do have an MCL. But we don't have one for the inhalation 
pathway.
    But because we use conservative screening levels in making 
a decision about whether or not we need to remediate a home, we 
are able to proceed. Because of the technology, then, if the 
conservative screening level is met, then the technology that 
we would employ to solve the problem already takes down the TCE 
levels to a very low level. So the fact that we don't have a 
health-based action level isn't stopping us from proceeding 
with cleanup at all. And the technology we use, again, achieves 
a very low level. We are proceeding with these sites all over 
the country, as well as in New York.
    Mr. Hall. Thank you very much. Thank you, Mr. Chairman.
    Mr. Baird. Thank you, Mr. Hall.
    Just a couple of final comments or questions. Mr. Grumbles, 
these water enterprise bonds, this Committee just passed last 
week, I think it was, or the week before, as you know, you 
testified regarding the State Revolving Loan Fund. One of the 
contentious issues which was resolved through the democratic 
process was Davis-Bacon applicability in SRF funds. What would 
be your opinion about whether Davis-Bacon and other Federal 
rules apply through water enterprise bonds, if those are 
private capital versus public capital?
    Mr. Grumbles. Congressman, I need to get back to you on 
that. The issue of Davis-Bacon applicability to private 
activity bonds for us, the reason we are so enthused about 
removing that State volume cap is we think it will provide 
communities options and choices to come up with ways to fund 
public works projects. I don't think it speaks directly to 
Davis-Bacon, but we certainly understand the importance of the 
question and commit to get back to you on that.
    Mr. Baird. I hope our Committee will get back to you on 
that as well, possibly statutorily if necessary. I appreciate 
that.
    I just want to put a marker down. You have articulated and 
others have on the panel today that the shortfall in 
infrastructure funding, whether it is water, today it is water, 
yesterday I think or the day before we had a hearing on highway 
shortfalls. We know aviation has a shortfall. We know rail 
does. Engineering societies suggest we have a $1.6 trillion 
infrastructure deficit, $1.6 trillion dollars. That is 
significant. And it is in addition to our $8.7 trillion fiscal 
debt.
    One of the things I think we might consider would be where 
we can find some money to fill that gap. We also separately, 
many of us believe we ought to set Social Security trust funds 
in a lockbox. As you know, they are currently borrowed by the 
general fund, which theoretically pays revenue back, but it is 
all a paper transaction, and basically an IOI, not even an IOU.
    I think there is merit to exploring the possibility of 
investing our Social Security trust fund surplus in an 
infrastructure development bank. Currently, as you know, many 
of the private-public partnerships are being funded by 
Macquarie, which is largely funded by Australian based 
retirement funds.
    I find it rather ironic that Australian retirees are going 
to build U.S. infrastructure and then U.S. citizens are going 
to pay the Australian retirees back over time for the privilege 
of having used their money, when we have, in the next five 
years, $1.2 trillion of Social Security trust funds that are 
going to be borrowed by our own general fund, with zero real 
dollar revenue coming back. I would much rather us look at 
investing our trust fund surpluses today toward infrastructure 
development to create jobs to sustain our economy and then when 
the time comes, to draw down on those funds to pay back the 
Social Security retirees. We have it available through this 
bond structure, this infrastructure bank.
    So I just put that out there. I don't know if the 
Administration is interested, and there are doubtless pros and 
cons that smarter people than I would know. But it is sort of 
common sense to me. I would rather that our retirees are 
getting paid back than others.
    So I want to thank all our panelists today and those who 
joined us today and the members as well for their 
participation. Again, some members of the Subcommittee may have 
follow-up questions for the record. We would expect a timely 
response to any questions forwarded to you.
    Thank you all for being here. That will conclude this 
hearing.
    [Whereupon, at 1:05 p.m., the subcommittee was adjourned.]
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